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Indian River County, Florida Clerk of the Circuit Court and Comptroller Notes To Financial Statements Year Ended September 30, 2017 NOTE 3 — PENSION PLAN - Continued Florida Retirement System - Continued Under the Pension Plan, early retirement is available before reaching normal retirement age and will be subject to an early-retirement reduction of 5% for each year your age at retirement is under your normal retirement age. For those employees who elect participation in the Investment Plan rather than the Pension Plan, vesting occurs after one year of service. Participants have access to the full value of their vested account balance when they leave FRS employment, regardless of age. These participants receive a defined contribution for self-direction in an investment product with a third parry administrator selected by the State Board of Administration. Benefits Provided: Retirement benefits are determined by age, years of service, the average of the highest 5 or 8 fiscal years of pay, membership class and the payment option selected at retirement. For further information concerning the FRS and contribution rates, please read the County -wide note on pension plans. Contributions: Employer contributions to the FRS are based on a percentage of covered payroll that has been actuarially determined as an amount, when combined with employee contributions, is expected to finance the cost of benefits earned by employees during the year with an additional amount to finance any unfunded accrued liability. For the year ended September 30, 2017, the Clerk's actuarial contribution to FRS under the Pension Plan was $274,086 and the Health Insurance Subsidy (HIS Program) was $56,430. Employee contributions for both plans were $91,379. Both employer and employee contributions were equal to 100% of the required contribution for each year. Pension Liabilities: At September 30, 2017, the Division of Retirement calculated the Clerk's liability of $3,094,827 for the FRS plan and $1,145,408 for the HIS Program, for a total of $4,240,235 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2017, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of July 1, 2017. The Clerk's proportion of the net pension liability was based on a projection of the Clerk's long-term share of contributions to the Pension Plan relative to the projected contributions of all participating employers, actuarially determined. At September 30, 2017, the Clerk's proportion was .010463% for the FRS Pension Plan and .010712% for the HIS Program. Discount Rate for Pension Plan: The discount rate used to measure the total pension liability was 7.10%. The projection of cash flows used to determine the discount rate assumed that plan member contributions will be made at the current contribution rate and that the Clerk's contributions will be made at statutorily required rates, actuarially determined. Based on those assumptions, the pension plans' fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, 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. 333