Finance Highlights 2011 1202 - Laserfiche WebLink

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Funding Policy. There is no statutory requirement for the City to prefund its OPEB obligation. The City has currently, and generally, has chosen to both pay plan benefits on a pay -as- you -go basis and to also fund an irrevocable trust that it established with PARS in Fiscal Year 2008 -09 (the "PARS Trust "). The City paid and contributed the following amounts for eligible employees as its regular employer contributions for and over its last three Fiscal Years: No. of Employees Amount Contributed Amount Paid Under Fiscal Year Ended to PARS Trust Pay -as- you -go June 30, 2009 [$500,000] [$900,000] June 30, 2010 [$500,000] [$900,000] June 30, 2011 - [$900,000] For Fiscal Year 2010 -11, the City did not contribute to the PARS Trust. [To be updated by the City, with Bianca Lin and John Bartel]. The City presently anticipates that its pay -as- you -go plan benefit expense will be [$ ] for Fiscal Year 2011 -12, and that it will also contribute [$500,000] to the PARS Trust for this same fiscal year. Funded Status and Funding Progress. As of June 30, 2009, the latest valuation date, the funded status of the plan, was as follows: Actuarial accrued liability (AAL) $16,853,000 Actuarial value of plan assets $500,000 Unfunded actuarial accrued liability (UAAL) $16,353,000 Funded ratio (actuarial value of plan assets /AAL) 3% Covered payroll (active plan members) $29,408,000 UAAL as percentage of covered payroll 55.6% Actuarial valuations of an ongoing plan involve estimates of the value of expected benefit payments and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. Actuarial Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short -term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long -term perspective of the calculations. In the June 30, 2009 actuarial valuation, the entry age normal actuarial cost method was used with a 30 year closed amortization period and level percentage of pay. There were no assets in the plan as of the valuation date. The actuarial assumptions are as follows: A -30