Office of Program Policy Analysis and Government Accountability
Office of Program Policy Analysis and Government Accountability

Florida Retirement System Pension Plan Valuation Met Standards

Report 11-17, May 2011




Report Summary

This report discusses issues related to the state's retirement programs. Our actuarial consultant, Gabriel Roeder Smith & Company, concluded that the 2010 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 valuation were generally reasonable. However, our consultant made several observations.

  • The actuarial value of the pension fund was $120.9 billion, with an unfunded actuarial liability of $16.7 billion as of July 1, 2010.
  • The 2010 valuation does not take into account an assumption for the probability that system members will participate in the Deferred Retirement Option Program (DROP) and may understate the unfunded actuarial liability by $2.02 billion. Our consultant believes that future valuations should include disclosures that fully reflect the effect of expected DROP participation.
  • The payroll growth assumption understates actual payroll growth experience. As a result, amortization of the actuarial liability may be understated by between $210 and $270 million. To address this issue, our consultant believes that future FRS actuarial reports should disclose the 10-year history of payroll growth using the unfunded actuarial liability funding approach. Our consulting actuary also noted that while not unreasonable, the inactive healthy mortality rate assumptions appear conservative.
  • Finally, our consultant believes that the actuarial valuation would be improved by providing prior year results in a side-by-side comparison with current year results as appropriate.


Related Reports
  1. Actuarial Review of the July 1, 2013 Actuarial Valuation of the Florida Retirement System
    Report 14-FRS July 2014
  2. Actuarial Review of the July 1, 2012 Actuarial Valuation of the Florida Retirement System
    Report 13-FRS August 2013
  3. Florida Retirement System Pension Plan Valuation Met Standards
    Report 12-09 July 2012
  4. Florida Retirement System Pension Plan Valuation Met Standards
    Report 10-46 June 2010
Copies of this report in print or alternate accessible format may be obtained by email OPPAGA@oppaga.fl.gov, telephone (850) 488-0021, or mail 111 W. Madison St., Room 312 Tallahassee, FL 32399-1475.
Copies of this report in print or alternate accessible format may be obtained by email OPPAGA@oppaga.fl.gov, telephone (850) 488-0021, or mail 111 W. Madison St., Room 312 Tallahassee, FL 32399-1475.
Florida Retirement System, actuarial valuation, actuary, DROP, funding ratio