10-25-04 Regular Meeting of La Porte Audit Committee

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CITY OF LA PORTE, TEXAS r Notes to the Financial Statements - Continued September 30, 2004 6. Pension Benefits - Continued Texas Statewide Emergency Services Personnel Retirement Fund rSummary of Significant Accounting Policies and Plan Asset Matters The Texas Statewide Emergency Services Personnel Retirement Fund financial statements are prepared using the accrual basis of accounting. The Fund's fiscal year is from September 1 through the following r August 31. Contributions are recognized as revenues in the period in which they are due to the Fund. No contributions applicable to the H.B. 258 Texas Local Fire Fighters Retirement Act (TLFFRA) are included herein. ' The Texas Statewide Emergency Services Personnel Retirement Fund investments are reported at a smoothed market -related value. rPlan Description The Fire Fighters' Pension Commission is the administrator of the Texas Statewide Emergency Services Personnel Retirement Fund, a cost sharing multiple employer pension system established and administered by the State of Texas to provide pension benefits for emergency services personnel who serve without monetary - remuneration. The Texas Statewide Emergency Services Personnel Retirement Fund is considered a component unit of the State of Texas financial reporting entity and is included in the State's financial reports as a pension trust fund. At August 31, 2002 there were 173 member departments participating in the pension system. The following table summarizes the pension system membership as of August 31, 2002: r Retirees and beneficiaries currently receiving benefits 1,422 Terminated members entitled to benefits but not yet receiving those 1,629 Current active members (vested and non -vested) 4,618 rThe pension system was created by Senate Bill 411, 65th Legislature, Regular Session (1977). Benefit provisions include retirements benefits as well and death and disability benefits. Members are vested at the beginning of the fifth year of service, at 5% per year of service for the first ten years and 10% for each of the next five years of service. Upon reaching age 55, a vested member may retire and receive a monthly pension equal to his vested percentage multiplied by six times the governing body's average monthly contribution over the member's years of qualified service. For years of service in excess of 15 years, this monthly benefit is increased at the rate of 7% compounded annually. ' Death and disability benefits are dependent on whether or not the member was engaged in the performance of duties at the time of death or disability. Death benefits include a lump -sum amount and continuing monthly payments to a member's surviving spouse and/or dependents. rContribution requirements were established by S.B. 411, 65th Legislative, Regular Session (1977) and no contributions are required by members. The governing bodies of participating department members are required to contribute at least $12 per month for each member. Additional contributions may be necessary ' to pay for unfunded prior service costs and "buybacks" of vested benefits. The State may also be required to make a limited amount of annual contributions to make the fund actuarially sound. ' Contributions Required and Contributions Made As previously stated the required contribution of at least $12 per member per month is not actuarially determined. The minimum contribution amount was established by S.B. 411, 65th Legislature, Regular r Session (1977). For the fiscal year ending August 31, 2002, contributions totaling $1,768,059 for dues and prior service were paid into the fund by the governing bodies sponsoring the member participating departments. The contributions made were equal to the contributions required. 65