1983-03-02 Regular Meeting - Laserfiche WebLink

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. e . CITY OF LA PORTE Page 6 of 12 ... NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1982 .. . . . ~ . 1. EMPLOYEES' RETI REMENT PLAN The City participates in a Retirement Plan administered totally by the Texas Municipal Retirement System. After 90 days of employment with the City, participation in the pIan becomes mandatory. Employees are required to contribute 7% of their gross wages and this is matched by the City. The City's contribution for the fiscal year was $187,955. Participants become vested in the City's contribution after 20 years of credible service if less than 60 years of age, and after 15 years of service if more than 60 years of age. The date of the most recent actuarial valuation is December 31, 1981 and was based on the plan of benefits in effect on January 1, 1982. The actuarial cost method used was the Unit Credit Actuarial Cost Method. The unfunded accrued liability is being amortized with a level percent- age of payroll over a period of 25 years which began January 1981. The actuarial cost for 1981 (as a percentage of payro11) was 3.76% for the normal cost contribution rate and 1.07% for the prior service contri- bution rate or 4.83% for the total retirement contribution rate. The actuarial present value of accrued benefits, total assets, and unfun- ded accrued liability at December 31, 1981 is as follows: . Actuarial Present Value of Accrued Benefits Vested a. Annuitants b. Nonretired members Nonvested Total Accrued Benefits Total Assets (Book Value) Unfunded Accrued Liability $ 271,513 1,078,477 298,833 $1,648,823 1,087,982 560,841 . There have been no changes in the actuarial cost method since the previous valuation; however, the interest rate and annuitant morality assumption have been changed. The impact of the change as of the valuation date was to increase the unfunded accrued liability by $13,342 and to increase the 1983 prior service contribution rate by .02%. There have been no changes in benefits since the previous val- uation and all employees who were members of the System on the valua- tion date have been included in the valuation. Since the System is of the money-purchase type, the interest earned by the System and realized investment gains and losses are distributed annually to the accounts of the members and the municipalities. Gains (losses) from other sources decrease (increase) the unfunded accrued liability and are thus amortized using a spread method. There has been no change in the treatment of actuarial gains and losses since the previous valuation. Because of the money-purchase nature of the System, there is no need for an interest rate assumption in valuing the actuarial present value of accrued benefits for nonretired members. For annuitants, the actuarial present value of benefits is calculated using a 5% interest rate assumption. The 5% assumption is also used in calculating the prior service contribution rate. -, -16-