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Clermont Police Officers' Retirement Plan and Trust
The Clermont Police Officers' Retirement Plan and Trust was established by the City of Clermont, Florida, to provide retirement, disability, and survivor...
Clermont Police Officers' Retirement Plan and Trust
The Clermont Police Officers' Retirement Plan and Trust was established by the City of Clermont, Florida, to provide retirement, disability, and survivor benefits exclusively to its police officers. Governed by a board of trustees and subject to city ordinance, the plan operates under Chapter 185 of the Florida Statutes — legislation that sets minimum benefit standards and funding requirements for municipal police pension funds. The underlying wealth is sourced from mandatory employee contributions, city ad valorem tax revenue, and state insurance premium tax rebates distributed annually. Despite the rise of 401(a)-style defined contribution alternatives for Florida municipal employees, Clermont has maintained its traditional defined benefit structure for police officers, prioritizing income certainty over portability. The plan’s investment strategy reflects the conservative, liability-driven posture typical of small municipal pension funds. The portfolio is allocated primarily to domestic large-cap equities, investment-grade fixed income, and some private markets exposure, often through external managers. Like many Florida municipal pension plans, it receives annual actuarial valuations — typically from firms such as Foster & Foster or Gabriel, Roeder, Smith & Company — which set the assumed rate of return (frequently around 7.0%) and dictate the required annual municipal contribution. Direct co-investments or club deals are absent; the plan deploys capital through institutional fund commitments and separately managed accounts, with no known permanent staff dedicated to origination. As of the most recent public records, the plan's trustees include three city officials, two police officer representatives, and a fifth member appointed by the city council, per Chapter 185 requirements. The board meets at least quarterly in Clermont, Florida. The fund’s total asset value is not regularly disclosed to the public, though Florida municipal pension funds of this size typically hold between $5 million and $50 million in assets. In September 2022, the board would have received its annual actuarial valuation report, setting the contribution rate for the upcoming fiscal year — the most significant annual operational event for any fund of this type. The plan’s structural distinction is its lock-in to the Chapter 185 statutory framework — a feature that creates both stability and rigidity. Unlike corporate or private-sector pension vehicles, the Clermont Police Officers' Pension Board cannot unilaterally amend benefit accrual rates, vesting periods, or the fact of its existence without a collective bargaining agreement and city council ordinance. This creates an investment horizon that must match a liability stream stretching decades into the future, fostering a deeply conservative allocation model that subjugates return-seeking to the demands of actuarial certainty.
General information
Firm type
Pension Fund
Location
Region
North America
Country
United States
City
Palm Beach Gardens
Corporate office
Palm Beach Gardens, FL, United States
Frequently asked questions
Who governs investment decisions at the Clermont Police Officers' Retirement Plan?
A five-member Board of Trustees is responsible for all investment and administrative decisions. By law, the board consists of three city officials, two police officer representatives, and a fifth member appointed by the city council. Investment policy is typically set through an investment policy statement and implemented via external fund managers, with the board retaining authority over asset allocation changes and manager selection.
Is this a state-wide plan, or specific to Clermont's police department?
It is a single-employer plan serving only sworn police officers of the City of Clermont, Florida. It is not part of the Florida Retirement System, the state-wide pension plan that covers most other public employees in the city. This separation is standard practice in Florida, where Chapter 185 allows municipalities to operate independent police pension funds distinct from the general employee plan.
How is the plan funded?
Funding comes from three primary sources: mandatory employee contributions at a fixed percentage of salary, contributions from the City of Clermont derived from ad valorem property taxes, and a share of state insurance premium tax revenues distributed annually. The specific contribution rates are reset each year based on an actuarial valuation that measures the plan's funded status against its projected benefit obligations.
What is the plan's investment posture toward private markets?
The plan maintains exposure to public equities and fixed income as its core liquidity sleeve, with potential smaller allocations to real estate or private equity funds of funds. As a small municipal plan, it typically does not participate in direct co-investments or venture stage deals, relying instead on institutional commingled funds for alternative asset access.
Can the plan be terminated or converted to a defined contribution arrangement?
No — not unilaterally. Chapter 185 pension plans can only be amended or terminated through a collective bargaining agreement between the city and the police union, followed by a city ordinance. Moreover, Chapter 185 imposes strict minimum benefit standards, making full conversion to a defined contribution plan legally complex and subject to police officer approval.
What driving assumption shapes the plan's asset allocation?
The assumed actuarial rate of return — often approximately 7.0% — is the single most influential number in the portfolio's construction. Any shortfall between actual returns and this assumption must be made up by increased future city contributions. The board constructs the portfolio with this liability stream — not relative market benchmarks — as the binding constraint, favoring income-producing assets and capital preservation features.
Who handles the plan's actuarial and administrative services?
Florida municipal plans of this size typically retain third-party actuarial firms such as Foster & Foster or Gabriel, Roeder, Smith & Company to produce annual valuations and calculate required employer contributions. Day-to-day administration is often managed by a contract plan administrator or the city's finance department, with legal counsel on retainer for compliance with Chapter 185 and Florida Sunshine Law requirements for public meetings.
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