HomeMy WebLinkAboutContract 61621CSC N o. 61621
�GRS
April 25, 2024
Mr. Reginald Zeno
Chief Financial Officer
City of Fort Worth, Texas
200 Texas Street
Fort Worth, Texas 76102
Reginald.Zeno@fortworthtexas.gov
P: 469.524.0000 � www.grsconsulting.com
Subject: GASB Statement No. 68 Reporting and Disclosure Information for the City of Fort Worth
Fiscal Year Ending September 30, 2024
Dear Mr. Zeno,
This report provides information required by the City of Fort Worth (the City) with regards to the
Employees' Retirement Fund of the City of Fort Worth (FWERF) in connection with the Governmental
Accounting Standards Board (GASB) Statement No. 68, "Accounting and Financial Reporting for Pensions,"
for the City's fiscal year ending September 30, 2024.
The Net Pension Liability is not an appropriate measure for measuring the sufficiency of plan assets to
cover the estimated cost of settling the employer's benefit obligation. The Net Pension Liability is not an
appropriate measure for assessing the need for or amount of future employer contributions. A calculation
of the plan's liability for purposes other than satisfying the requirements of GASB Statement No. 68 may
produce significantly different results. This report may be provided to parties other than the City only in
its entirety and only with the permission of the City.
The Total Pension Liability, Net Pension Liability, and certain sensitivity information shown in this report
are based on an actuarial valuation performed as of December 31, 2022. The Total Pension Liability was
rolled-forward from the valuation date to the FWERF plan year ending September 30, 2023, using
generally accepted actuarial principles. There were no significant events or changes in benefit provisions
that required an adjustment to the roll-forward liabilities as of September 30, 2023. It is our opinion that
the recommended assumptions are internally consistent, reasonable, and comply with the requirements
under GASB Statement No. 68.
The actuarial valuation performed as of December 31, 2022 indicates that FWERF is expected to pay
Conditional Ad Hoc COLAs in the future. As a result, the Total Pension Liability as of September 30, 2023
was increased by $15.5 million to account for the future expected Conditional Ad Hoc COLAs.
This report is based upon information, furnished to us by FWERF staff, which include benefit provisions,
membership information, and financial data. We did not audit this data and information, but we did apply
a number of tests and concluded that it was reasonable and consistent. GRS is not responsible for the
accuracy or completeness of the information provided to us by FWERF staff. Any required information not
included here will need to be provided by the City, FWERF staff, the FWERF investment consultant or
auditor.
Mr. Reginald Zeno
April 25, 2024
Page 2
Certain tables included in the Required Supplementary Information should include a 10-year history of
information. As provided for in GASB Statement No. 68, this historical information is only presented for
the years in which the information was measured in conformity with the requirements of GASB Statement
No. 68. The historical information in this report will begin with the information presented for the FWERF
fiscal year ending September 30, 2014.
Paragraph 57 of GASB Statement No. 68 indicates that contributions to the pension plan subsequent to
the measurement date of the Net Pension Liability and prior to the end of the employer's reporting period
should be reported by the employer as a deferred outflow of resources related to pensions. The
information contained in this report does not incorporate any contributions made to FWERF subsequent
to September 30, 2023.
This report complements the actuarial valuation as of December 31, 2022, provided for plan funding
purposes, which was provided to FWERF and should be considered together as a complete report for the
FWERF plan year ending September 30, 2023. Please see the actuarial valuation report as of
December 31, 2022, dated April 19, 2023, for additional discussion of the actuarial valuation that was
used in the roll-forward, including the nature of actuarial calculations and more information related to
participant data, economic and demographic assumptions, and benefit provisions. This actuarial
valuation report is publically available on FWERF's website.
To the best of our knowledge, the information contained within this report is accurate and fairly
represents the actuarial position of the Employees' Retirement Fund of the City of Fort Worth. All
calculations have been made in conformity with generally accepted actuarial principles and practices as
well as with the Actuarial Standards of Practice issued by the Actuarial Standards Board. Mr. Newton and
Mr. Detweiler are members of the American Academy of Actuaries (MAAA) and meet the Qualification
Standards of the American Academy of Actuaries to render the actuarial opinion contained herein.
Respectfully submitted,
�t �,�v �--
Joseph Newton, FSA, EA, MAAA
Pension Market Lead and Actuary
,, --��
��.
I �
Bill Detweiler, ASA, EA, FCA, MAAA
Consultant and Actuary
Summary of Population Statistics
The total pension liability described in this report is based on the FWERF membership as of
December 31, 2022:
Inactive Plan Members or Beneficiaries Currently Receiving Benefits
Inactive Plan Members Entitled to But NotYet Receiving Benefits
Active Plan Members
Total Plan Members
Measurement of the Net Pension Liability
5,037
1,738
6,656
13,431
The Net Pension Liability is measured as the Total Pension Liability, less the amount of the plan's Fiduciary
Net Position. In actuarial terms, this is analogous to the accrued liability less the market value of assets
(not the smoothed actuarial value of assets that is often encountered in actuarial valuations based on the
FWERF Board's adopted assumptions and methods).
A single discount rate of 7.00% was used to measure the total pension liability as of September 30, 2022
and September 30, 2023. This single discount rate was based on an expected rate of return on pension
plan investments of 7.00%. Based on the stated assumptions and the projection of cash flows, the pension
plan's fiduciary net position and future contributions were sufficient to finance all future benefit
payments of current plan members. As a result, the long-term expected rate of return on pension plan
investments was applied to all periods of projected benefit payments to determine the total pension
liability.
The projection of cash flows used to determine this single discount rate assumed that plan member and
employer contributions will be made at the current levels and remain a level percentage of payroll. In
addition, the projection of cash flows includes the Risk-Sharing Contributions and Conditional Ad Hoc
COLAs expected to be paid in the future.
Sensitivity of the Net Pension Liability to the Single Discount Rate Assumption
Below is a table providing the sensitivit;� of the Net Pension Liability to changes in the discount rate as of
September 30, 2023. In particular, the table presents the plan's Net Pension Liability, if it were calculated
using a single discount rate that is one-percentage-point lower or one-percentage-point higher than the
single discount rate:
1% Decrease
6.00%
$ 3,121,880,253
Current Single Discount
Rate Assumption
7.00 %
$ 2,498,828,682
1% Increase
8.00 %
$ 1,980,582,409
��G R S Employees' Retirement Fund of the City of Fort Worth
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Schedules of Required Supplementary Information
Schedule of Employer Contributions
Aduarially Contribution Adual Contribution
FY Ending Determined Adual Deficiency Covered as a% of
September 30, Contribution Contribution (Excess) Payroll Covered Payroll
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
$ 78,165,049
80,820,598
84,746,991
89,408,134
93,504,064
113,109,911
124,743,976
128,046,174
137,012,301
148,281,745
$ 4,772,841
12,741,986
16,592,926
22,777,147
38,262,293
23,057,952
35,415,467
37,660,639
37,303,192
26,777,742
$ 391,216,461
404,507,497
424,371,512
447,488,158
467,754,197
484,410,754
509,575,065
523,064,436
539,843,582
557,869,620
Notes to Schedule of Contributions
19.98 %
19.98 %
19.97 %
19.98 %
19.99 %
23.35 %
24.48 %
24.48 %
25.38 %
26.58 %
Valuation Date: December 31, 2022
Notes TheActuarially Determined Contribution is equal tothetotal calculated contribution
rate in the prior actuarial valuation, minus the portion expected to becovered 6y
employee contributions, multiplied by the covered-employee payroll. City and Member
contribution rates areestablished byordinance.
The assumptions and.methods, summarized below, were adopted by the Board of
Trustees on March 27, 2019 based on the experience investigation that covered the
three-year period from January 1, 2016 through December 31, 2018. These assumptions
first applied for actuarial valuation as of Decem6er 31, 2018 and the Actuarially
Determined Contribution for FYE 2020.
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method EntryAge Normal
Amortization Method Level Percentage of Payroll, 30-year closed beginning in 2018
RemainingAmortizationPeriod 26years
AssetValuation Method Five-yearsmoothed market
Inflation 2.50%
Sa I a ry I ncrea s es 3.25% - 28.25%
Investment Rate of Return 7.00%
RetirementAge Experience-based table of rates 6ased onjob classification and number ofyears since
fi rst reti rement el i gi bi I i ty
Mortality PubG-2010 MortalityTables for General Employees and Pu6S-2010 Healthy Retiree
MortalityTablefor PoliceOfficers and Firefighters. Generational mortality
i mprovements from the yea r 2010 us i ng the ulti mate morta I ity i mprovement rates i n the
2014-2019 MP ta bl es.
Cost-of-Living Adjustment
Other Information:
Notes
$ 82,937,890
93,562,584
101,339,917
112,185,281
131,766,357
136,167,863
160,159,443
165,706,813
174,315,493
175,059,487
A 2% cost-of-I ivi ng a dj ustment (COLA) is assumed for a I I members i n the Gua ra nteed
COLA progra m; no CO LPs a re ass umed for members with a Va ri a bl e COLA. Ti mi ng of
Conditional Ad Hoc COLAs is based on an open group projection.
The covered-employee payroll was estimated based on the actual employer
contributions received and a weighted average contribution rate.
G R S Employees' Retirement Fund of the City of Fort Worth 5
NOTES TO FINANCIAL STATEMENTS
Pension Expense for FWERF Fiscal Year Ending September 30, 2023
To be used for the City's Reporting for Fiscal Year Ending September 30, 2024
1. Service Cost
2.InterestontheTotal Pension Liability
3. Current-Period Benefit Changes
4. Empl oyee Contri buti ons
5. Projected Earnings on Plan Investments
6. Pension Plan Administrative Expense
7. Other Changes in Plan Fiduciary Net Position
8. Recognition of Outflow (Inflow) of Resources dueto Liabilities
9. Recognition of Outflow (Inflow) of Resources dueto Assets
10. Total Pension Expense
Recognition of Deferred Outflows and Inflows of Resources
76,529,318
346,499,377
(72,322,732)
(171,153,793)
7,327,309
67,683,273
37,246,010
$ 291,808,762
According to paragraph 33 of GASB No. 68, differences between expected and actual experience and
changes in assumptions are recognized in pension expense using a systematic and rational method over a
closed period equal to the average of the expected remaining service lives of all employees that are
provided with pensions through the pension plan (active employees and inactive employees) determined
as of the beginning of the measurement period.
At the beginning of the 2023 fiscal year, the expected remaining service lives of all employees was 72,820
years for FWERF. Additionally, the FWERF plan membership (active employees and inactive employees)
was 13,431. As a result, the average of the expected remaining service lives for purposes of recognizing
the applicable deferred outflows and inflows of resources established in the 2023 fiscal year is 5.4 years.
Additionally, differences between projected and actual earnings on pension plan investments should be
recognized in pension expense using a systematic and rational method over a closed five-year period.
For this purpose, the deferred outflows and inflows of resources are recognized in the pension expense as
a level dollar amount over the closed period identified above.
G R s Employees' Retirement Fund of the City of Fort Worth
NOTES TO FINANCIAL STATEMENTS
Statement of Outflows and Inflows Arising from Current and Prior Reporting Periods
For Plan Year Ending September 30, 2023
To be used for the City's Reporting for Fiscal Year Ending September 30, 2024
A. New Deferred Outflows and Inflows of Resources by Source Established in Fiscal Year
Outflows Inflows NetOutflows
of Resources of Resources of Resaurces
1. Differences between expected and actual experience $ 0 $ 27,404,370 $ (27,404,370)
2. Assumption Changes 0 0 0
3. Net Difference between projected and actual
earnings on pension plan investments 0 47,410,863 (47,410,863)
4.Total $ 0 $ 74,815,233 $ (74,815,233)
B. Outflows and Inflows of Resources by Source to 6e recognized in Current Pension Expense
Outflows Inflows NetOutflows
of Resources of Resources of Resources
1. Differences between expected and actual experience $ 12,609,679 $ 8,290,521 $ 4,319,158
2. Assumption Changes 90,914,213 27,550,098 63,364,115
3. Net Difference between projected and actual
earnings on pension plan investments
4. Total
118,811,102 81,565,092 37,246,010
$ 222,334,994 $ 117,405,711 $ 104,929,283
C. Deferred Outflows and Deferred Inflows of Resources by Source to be recognized in Future Pension Expense
Deferred Outflows Deferred Inflows NetOutflows
of Resources of Resources of Resources
1. Differences between expected and actual experience $ 5,910,079 $ 25,297,529 $ (19,387,450)
2.AssumptionChanges 81,822,790 0 81,822,790
3. Net Difference 6etween projected and actual
earnings on pension plan investments
4. Total
281,354,043 182,094,526 99,259,517
$ 369,086,912 $ 207,392,055 $ 161,694,857
D. Deferred Outflows and Deferred Inflows of Resources by Year to be recognized in Future Pension Expenses
outflows Inflows
City Fiscal Year Ending of Resources of Resources
2025 $ 184,450,789 $ 89,542,266 $
2026 92,748,936 86,705,727
2027 91,862,488 14,557,057
2028 24,699 14,557,055
2029 0 2,029,950
Thereafter 0 0
Total $ 369,086,912 $ 207,392,055 $
` �G R S
Net 0 utfl ows
of Resources
94,908,523
6,043,209
77,305,431
(14,532,356)
(2,029,950)
0
161,694,857
Employees' Retirement Fund of the City of Fort Worth 7
NOTES TO FINANCIAL STATEMENTS
Recognition of Deferred Outflows and Inflows of Resources
For Plan Year Ending September 30, 2023
To be used for the City's Reporting for Fiscal Year Ending September 30, 2024
Initial Remaining
Year Recognition CurrentYear Remaining Recognition
Established Initial Amount Period Recognition Recognition Period
Deferred Outflow (Inflow) due to Differences Between Expected and Actual Experience on Liabilities
2018 62,114,429 6.0 10,352,404 0 0.0
2019 (18,487,311) 5.9 (3,133,443) (2,820,096) 0.9
2020 (476,723) 5.8 (82,194) (147,947) 1.8
2021 12,410,191 5.6 2,216,106 5,761,873 2.6
2022 230,544 5.6 41,169 148,206 3.6
2023 (27,404,370) 5.4 (5,074,884) (22,329,486) 4.4
Total 4,319,158 (19,387,450)
Deferred Outflow (Inflow) due to Assumption Changes
2018 (165,300,608) 6.0
2019 536,393,855 5.9
2020 0 5.8
2021 0 5.6
2022 0 5.6
2023 0 5.4
Total
(27,550,098)
90,914,213
0
0
0
0
63,364,115
0
81,822,790
0
0
0
0
81,822,790
0.0
0.9
1.8
2.6
3.6
4.4
Deferred Outflow (Inflow) due to Differences Between Projected and Actual Earnings on Plan Investmei
2018 27,007,746 5.0 0 0 0.0
2019 92,201,878 5.0 18,440,374 0 0.0
2020 49,395,331 5.0 9,879,067 9,879,063 1.0
2021 (360,414,593) 5.0 (72,082,919) (144,165,836) 2.0
2022 452,458,302 5.0 90,491,661 271,474,980 3.0
2023 (47,410,863) 5.0 (9,482,173) (37,928,690) 4.0
Total 37,246,010 99,259,517
G R s Employees' Retirement Fund of the City of Fort Worth 8
::�YOFFORT �
Name: David Co
City Manager
AT TEST:
�1�By: _U _______________ _
Name: Jannette Goodall
City Secretary
CONTRACT COMPLIANCE MANAGER:
By signing I acknowledge that I am the person responsible for monitoring and administration of
this contract, including all perfmmance and reporting requirements,
. (¼1/r@w. Rp-ufffluf< BY, Anthony Rousseau (Jun 26, 2024 12:34 CDT)
Name: Anthony Rousseau, Assistant Finance Director
APPROVE AS TO FORM AND LEAGALITY:
By: �ft• (//4,y--
Name: Denis C. McElroy, Assistant City Attorney