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Indian River County, Florida
<br />Board of County Commissioners
<br />Notes To Financial Statements
<br />Year Ended September 30, 2014
<br />NOTE 14 — PENSION PLANS
<br />Florida Retirement System
<br />Plan Description: The Board's employees participate in the Florida Retirement System (FRS), a cost-
<br />sharing, multiple -employer public employee retirement system, administered by the Florida Department
<br />of Management Services. Effective July 1, 2011, the FRS became a contributory plan for all members,
<br />except DROP participants, whereby members contribute 3% and employers pay a rate based upon each
<br />member's employment class. Employer rates effective as of July 1, 2014 were as follows: regular class
<br />7.37%, senior class 21.14%, special risk 19.82%, and elected official class 43.24%.
<br />Employees elect participation in either the defined benefit plan (Pension Plan) or the defined
<br />contribution plan (Investment Plan). If the employee enrolled in the FRS prior to July 1, 2011, normal
<br />retirement is age 62 with 6 years of service or 30 years of service, regardless of age. If the employee
<br />enrolled in the FRS on or after July 1, 2011, normal retirement is age 65 with 8 years of service or 33
<br />years of service, regardless of age. Under the Pension Plan, early retirement is available before reaching
<br />normal retirement age and will be subject to an early-retirement reduction of 5% for each year your age
<br />at retirement is under your normal retirement age. For those employees who elect participation in the
<br />Investment Plan rather than the Pension Plan, vesting occurs after one year of service. Participants have
<br />access to the full value of their vested account balance when they leave FRS employment, regardless of
<br />age. These participants receive a defined contribution for self-direction in an investment product with a
<br />third party administrator selected by the State Board of Administration.
<br />Retirement benefits are determined by age, years of service, the average of the highest 5 or 8 fiscal years
<br />of pay, membership class and the payment option selected at retirement.
<br />In addition to the above benefits, the FRS administers a Deferred Retirement Option Program (DROP).
<br />This program allows eligible employees to defer receipt of monthly retirement benefit payments while
<br />continuing employment with a FRS employer for a period not to exceed five years after electing to
<br />participate. Deferred monthly benefits are held in the FRS Trust Fund and accrue interest.
<br />Employer contributions to the FRS for the fiscal years ended September 30, 2012, 2013 and 2014, were
<br />equal to 7.7%, 9.1%, and 11.5% of the annual covered payroll. Employer contributions to the FRS for
<br />the fiscal years ended September 30, 2012, 2013, and 2014, were $2,905,921, $3,397,021 and
<br />$4,308,039 respectively. Employee contributions for the fiscal years ended September 30, 2012, 2013,
<br />and 2014 were $956,266, $919,672, and $930,338. Both employer and employee contributions were
<br />equal to 100% of the required contribution for each year.
<br />Florida Statutes Chapter 121, as may be amended from time to time by the state legislature, determines
<br />contribution rates for the various membership classes of the FRS. The FRS issues a publicly available
<br />financial report that includes financial statements, ten-year historical trend information and other
<br />required supplementary information. That report may be obtained by writing to the Florida Department
<br />of Management Services, Division of Retirement, Attention: Research and Education Section, P.O. Box
<br />9000, Tallahassee, Florida 32315-9000, or from the website at www.dms.myflorida.com. The funding
<br />policy is described in detail in the Florida Retirement System note in the County -wide financial
<br />statements.
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