Firefighters' Retirement Fund Board of Trustees

Summary

This item addresses the posting requirements for municipal governmental pension plans on the City's website. A memo from Klausner, Kaufman, Jensen & Levinson outlines documents required to be posted, including detailed accounting reports, actuarial valuations, investment return histories (60T Disclosure), Section 112.664 compliance information, and a link to the Division of Retirement's Summary Fact Sheet. The City's website has been reviewed and found to be compliant with these requirements. The Pension Records Custodian is identified as Alicia Gaither in the Pension Office at 201 SE 3rd Street, Ocala, FL 34471, with contact information provided.

Citizen Impact

This ensures transparency for residents regarding the financial health and management of the city's pension plans. Key financial documents are publicly accessible on the city's website, allowing for public oversight.

Confidence

high

Summary

This report details the investment performance of the Ocala Firefighters' Retirement Plan for the period ending December 31, 2025, managed by Mariner. The total fund value increased to $116,376,030 from $113,621,519 in the prior quarter.

Market Environment (Q4 2025):

• The Federal Reserve reduced the federal funds target range by 0.25% in December, marking the third rate cut of the year, bringing the policy rate to 3.50%–3.75%.
• Economic conditions moderated, inflation eased, and labor market momentum softened.
• Domestic equity markets saw modest gains, while international equities outperformed. Fixed income markets delivered positive returns, primarily from coupon income.

Asset Allocation & Compliance:

• The plan's asset allocation remained largely compliant with policy targets, with 49.6% in Domestic Equity (target 45%), 13.9% in Foreign Equity (target 15%), 21.8% in Broad Market Fixed Income (target 20%), 5.2% in Non-Core Fixed Income (target 10%), 6.8% in Direct Real Estate (target 10%), and 2.7% in Total Cash Composite (target 0%).

Overall Fund Performance (Net of Fees):

• Quarter (QTR): 2.16% (vs. Policy 2.20%, Median 2.00%)
• 1-Year (YTD): 13.80% (vs. Policy 14.95%, Median 13.64%)
• 3-Year: 13.17% (vs. Policy 13.56%, Median 12.61%)
• 5-Year: 7.12% (vs. Policy 7.70%, Median 6.95%)
• Inception (10/01/1994): 7.56% (vs. Policy 8.54%, Median 7.80%)

Compliance Discrepancies:

• The report's internal compliance checklist states the Total Plan met or exceeded its benchmark over 3 and 5 years, and ranked within the top 40th percentile for both periods. However, the detailed performance data shows the fund underperformed its policy benchmark for both 3-year and 5-year periods, and for the 5-year period, it ranked in the 44th percentile, which is outside the top 40th percentile.

Fees & Private Equity:

• Total estimated annual fees for the fund are $296,745, representing 0.25% of total assets.
• The Crescent Direct Lending Levered Fund II (private equity) shows an Inception IRR of 8.4% and a Total Value to Paid In (TVPI) multiple of 1.3.

Citizen Impact

This report directly impacts the financial health and long-term stability of the Ocala Firefighters' Retirement Plan, which ensures pension benefits for current and future firefighters. While the fund generally performed well against its peer median, its underperformance against its own policy benchmarks and discrepancies in the compliance assessment could signal potential challenges in meeting long-term financial goals without adjustments.

Confidence

medium

Summary

This document from Nyhart, an actuarial firm, analyzes the City of Ocala Firefighters' Retirement Plan's COLA (Cost of Living Adjustment) Fund for 2026. The analysis recommends increasing the COLA 'node' from $738 (2025) to $757 (2026), representing a 2.6% increase. This adjustment is intended to maintain previously stated reserve goals and affects the future level of benefits for retirees.

Key changes include:

• New Interest Policy: The Board adopted a new policy for crediting interest to the COLA fund, aligning with Ordinance §43-35(b)(3). Interest will be the market rate of return on the pension fund, capped between 0% and 7%. Any excess over 7% (based on a 10-year average) will be transferred to reduce the pension fund's unfunded actuarial accrued liability if its funded ratio is below 90%.
• Example Impact: A retiree with 25 years of service, who would have received $89/month in 2025 and $118/month in 2026 under the old table, will now receive $121/month in 2026 due to the increased COLA node.
• DROP Exits: Three members (Robert Altman, Joseph Talley, Jeffrey Werthmuller) are assumed to exit the Deferred Retirement Option Plan (DROP) in 2026, commencing their COLA benefits.

Citizen Impact

This analysis directly impacts retired Ocala firefighters by recommending an increase in their Cost of Living Adjustment (COLA) benefits for 2026. Retirees may see their monthly COLA payments increase, for example, from $118 to $121 for a 25-year service member.

Confidence

high

Summary

The Firefighters' Retirement Fund Board of Trustees met on December 1, 2025, to address several key financial and administrative matters. The board finalized pension litigation, authorizing the plan administrator to develop an implementation plan for correcting retiree and employee benefits affected by an overtime ruling. This plan will prioritize retirees, then DROP participants, and finally active members.

Additionally, the board updated its Investment Policy Statement to comply with new state legislation requiring investment decisions to be based solely on pecuniary (risk-adjusted financial) reasons, prohibiting political considerations like boycotting or divesting. The board also approved applying a 0%-7% interest corridor to the COLA Fund and transferring excess returns to the pension fund prospectively. In terms of investments, the board approved selling $2 million of Vanguard Small Cap Index Fund assets to cover upcoming expenses. The minutes from August 18, 2025, and expenses from August to November 2025 were also approved.

Citizen Impact

This meeting impacts current and future Ocala firefighters by ensuring correct pension benefit calculations related to overtime and by updating investment policies to align with state law, potentially affecting long-term fund stability.

Confidence

high

Summary

This document details the expenses for the Fire Department's pension fund for FY24-25 and outlines the budget for FY26-27. It includes breakdowns of revenues such as employer and employee contributions, state pension contributions, and investment income. Expenses are categorized into retiree, disability, and beneficiary payments, as well as administrative costs, actuarial services, legal fees, and investment management fees. The document lists specific dollar amounts for each revenue and expense category, totaling $9,838,919.25 in revenues and $6,547,813.83 in expenses for FY24-25, resulting in a net income/gain of $3,291,105.42.

Key Expense Categories (FY24-25):

• Pension Payments: $3,738,243.00 (Retiree, Disability, Drop, Beneficiary Payments)
• Investment Management Fees: $1,277,856.59
• Actuary Fees: $859,443.88
• Administration: $277,054.26

Key Revenue Categories (FY24-25):

• Employer Contributions: $3,951,430.06
• Employee Contributions: $1,532,208.16
• State Pension Contributions: $1,10,671.98
• Interest Income: $689,315.20

Citizen Impact

This report details the financial status of the Fire Department's pension fund, impacting the long-term financial stability for retired firefighters and their beneficiaries. While there is a significant net gain in FY24-25, the budget for FY26-27 will determine future contribution levels and pension payouts.

Confidence

high

Summary

This item details expenses for the City of Ocala Firefighters Retirement Plan for December 2025 and January 2026. The expenses include professional fees for legal services from Klausner, Kaufman, Jensen & Levinson totaling $1,705.00 for November 2025 and $1,120.00 for December 2025, related to reviewing offering documents and preparing for board meetings. Additionally, Mariner Institutional, LLC provided consulting services and performance evaluations for October, November, and December 2025, totaling $9,750.00. Ascensus, acting as a third-party administrator, billed $6,576.00 for November 2025 and $2,820.50 for December 2025 for consulting, actuarial, and administrative fees. Nyhart, also providing actuarial and consulting services, billed $23,781.00 for December 2025, including actuarial valuations and benefit calculations. The total amount due across these invoices for the specified periods is $30,357.00 (as of December 30, 2025 statement). Pages 13-16 show prior year expense summaries for pension benefits and payroll, with a total of $847,596.98 for the period ending in 2026.

Citizen Impact

This item details expenses for the Ocala Firefighters Retirement Plan, which are funded by contributions and investments related to the plan. Residents are not directly impacted by these specific operational expenses, as they are covered by the pension fund itself.

Confidence

high