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Office of Program Policy Analysis and Government Accountability

Program Review: Florida Retirement System Pension Plan Fully Funded and Valuation Met Standard, Report No. 08-30, April 2008
 
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Our actuarial consultant, Gabriel, Roeder, Smith & Company, concluded that the 2007 valuation was made in accordance with relevant state laws and rules and actuarial standards. It further concluded that the assumptions and methods used in the 2007 valuation were generally reasonable. However, our consultant also made several noteworthy observations and recommendations.
  • Our consultant noted that the 2007 valuation disclosed the actuarial present value of future benefits and the actuarial present values of future pay.  However, these values do not take into account an assumption for the probability that system members will participate in the Deferred Retirement Option Program (DROP).  As a result, our consultant recommended that future valuations include such disclosures that fully reflect the effect of expected DROP participation.
  • Additionally, our consultant continues to recommend that the valuation be improved by providing prior-year results in a side-by-side comparison with current-year results as appropriate.  This information would provide a ready comparison of changes in values and percentage changes in the Florida Retirement System’s membership, assets, and benefits.

Our consultant also continues to note that the amortization of the system’s surplus determined using the system’s rate stabilization method may not produce an equivalent result to amortizing the surplus over a 30-year period as set forth in Governmental Accounting Standards Board standards. For example, our consulting actuary pointed out that for the 2007 actuarial valuation, the amortization of the surplus using the rate stabilization method was $174 million, while an amortization of the surplus over a 30-year period was $357 million. However, our consultant also commented that this difference may not be considered a material amount in light of the size of the Florida Retirement System. To address this concern, we recommend that in future valuations, the Department of Management Services’ consulting actuary monitor the rate stabilization mechanism for consistency with Governmental Accounting Standards Board standards and report the results of its monitoring activities.

Which Government Program Summaries contain related information?

Retirement Benefits Administration
Department of Management Services

What other OPPAGA-related materials are available?

  • Report No. 14-FRS Actuarial Review of the July 1, 2013 Actuarial Valuation of the Florida Retirement System,published in July 2014.
  • Report No. 14-99 Actuarial Review of the July 1, 2013 Actuarial Valuation of the Florida Retirement System,published in July 2014.
  • Report No. 13-FRS Actuarial Review of the July 1, 2012 Actuarial Valuation of the Florida Retirement System,published in August 2013.
  • Report No. 13-99 Actuarial Review of the July 1, 2012 Actuarial Valuation of the Florida Retirement System,published in August 2013.
  • Report No. 12-09 Florida Retirement System Pension Plan Valuation Met Standards,published in July 2012.
  • Report No. 11-17 Florida Retirement System Pension Plan Valuation Met Standards,published in May 2011.
  • Report No. 10-46 Florida Retirement System Pension Plan Valuation Met Standards,published in June 2010.
  • Report No. 09-24 Florida Retirement System Pension Plan Valuation Met Standards,published in April 2009.
  • Report No. 07-24 Program Review: Florida Retirement System Pension Plan Fully Funded and Valuation Met Standard, published in April 2007.
  • Report No. 06-38 Program Review of the Florida Retirement System Pension Plan Fully Funded and Valuation Met Standard, published in April 2006.
  • Report No. 05-25 Program Review of the Florida Retirement System Pension Plan Fully Funded and Valuation Met Standards, published in April 2005.
  • Report No. 04-13 Program Review of the Florida Retirement System Pension Plan Fully Funded and Valuation Met Standards, published in February 2004.
  • Report No. 03-61 Special Review: Outsourcing Pension Plan’s Outreach Services Would Not Be Cost-Effective, published in November 2003. 
  • Report No. 03-21 Program Review:  Recommended Florida Retirement System Contribution Rates Remain Reasonable; Asset Growth Has Slowed, published in March 2003.
  • Report No. 02-20 Program Review: Recommended Florida Retirement System Contribution Rates Are Reasonable, published in March 2002.
  • Report No. 01-18 Program Review: Recommended Florida Retirement System Contribution Rates Are Reasonable, published in March 2001.
  • Report No. 99-52 Program Review: Investment of Florida Retirement System Assets Meets Goals, But Earnings Could Be Increased, published in May 2000.
  • Report No.  99-50 Program Review: The Florida Retirement System Continues to Be Fully Funded; Unfunded Liability Eliminated, published in May 2000.

Copies of this report in print or alternate accessible format may be obtained by telephone (850/488-0021), by FAX (850/487-9213), in person, or by mail (OPPAGA Report Production, Claude Pepper Building, Room 312, 111 W. Madison St., Tallahassee, FL 32399-1475).
e-mail address: oppaga@oppaga.fl.gov


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