02-14-11 Regular Meeting of Fiscal Affairs Committee

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CITY OF LA PORTE, TEXAS Notes to the Financial Statements September 30, 2010 6. Pension Benefits — Continued The required contribution rate for fiscal year 2010 was determined as part of the December 31, 2007 and 2008 actuarial valuations. Additional information as of the latest actuarial valuation, December 31, 2009, also follows: Actuarial Valuation Date 12/31/09 12/31/08 12/31/07 Actuarial cost method Projected Unit Credit Projected Unit Credit Projected Unit Credit Amortization method Level percent Level percent Level percent of payroll of payroll of payroll Remaining amortization period 28 years - closed 29 years - closed 30 years - closed Asset valuation method 10 year smoothed Amortized cost Amortized cost market Actuarial assumptions: Investment rate of return 7.5% 7.5% 7% varies by age varies by age varies by age Projected salary increases and service and service and service Inflation 3.0% 3.0% 3.0% Cost -of- living adjustments 2.1% 2.1% 2.1% Schedule of Funding Information The funded status as of December 31, 2009, is the most recent actuarial valuation date. The following schedule of funding progress presents multi -year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of benefits. Actuarial Valuation Date 12/31/09 12/31/08 12/31/07 Actuarial value of assets $ 52,637,477 $ 47,909,865 $ 49,108,552 Actuarial accrued liability 78,345,079 72,398,270 69,582,807 Percent funded 67.2% 66.2% 70.6% Unfunded (overfunded) actuarial accrued liability (UAAL) 25,707,602 24,488,405 20,474,255 Annual covered payroll 18,770,507 18,162,841 15,611,200 UAAL as a percentage of covered payroll 137.0% 134.8% 131.2% Texas Statewide Emergency Services Personnel Retirement Fund Summary 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 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. 66