03-26-12 Fiscal Affairs Committee

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CITY OF LA PORTE, TEXAS NOTES TO THE FINANCIAL STATEMENTS (continued) Note 11 - Post-employment Benefits (continued) Supplemental Death Benefits Fund The City also participates in the cost sharing multiple-employer defined benefit group term life insurance plan operated by the Texas Municipal Retirement System (TMRS) known as the Supplemental Death Benefits Fund (SDBF). The City elected, by ordinance to provide group term life insurance coverage to both current and retired employees. The city may terminate coverage under and discontinue participation in the SDBF by adopting an ordinance before November 1 of any year to be effective the following January 1. The death benefit for active employees provides a lump sum payment approximately equal to the employee’s annual salary (calculated based on the employee’s actual earnings, for the 12-month period preceding the month of death); retired employees are insured for $7,500; this coverage is an “other postemployment benefit, “ or OPEB. The city contributes to SDBF at a contractually required rate as determined by an annual actuarial valuation. The rate is equal to the cost of providing one-year term life insurance. The funding policy for the SDBF program is to assure that adequate resources are available to meet all death benefit payments for the upcoming year; the intent is not to pre-fund retiree term life insurance during employee’s entire careers The City’s contributions to the TMRS SDBF for the fiscal year ended 2011, 2010, and 2009 were $36,232, $34,554 and $5,312 respectively, which equaled to the required contributions. Schedule of Contribution Rates Annual Plan/CaleRequired Acutal Percentage ndar Contribution Contribution of ARC Year(Rate)Made (Rate)Contributed 20090.03%0.03%100% 20100.03%0.03%100% 20110.03%0.03%100% . 54