03-14-2018 Council Packet - Laserfiche WebLink

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If we reduce investment earnings by 5% of Previous Assets Less 20%: Assets of $1,928,634 *.80 = $1,542,907 Total Costs to Cover -------------------- $ 148,654 State Aid --------------- $56,255 5% Return on Assets - $77,145 Subtotal ------------------------ $ 133,400 REQUIRED CONTRIBUTION ----------- $ 15,254 Less than City Contribution of $31,000 What the above numbers indicate is that if we had a 20% market correction early in the year and then earned 5% on that reduced amount (this is the amount allowed to be assumed on the State’s forms), our required contribution to offset the deficit would be $4,123. Because this is less than the$31,000 we contribute, we would not have to make an additional payment. The risk to the City is if sustained market devaluations occur in subsequent years, we might be looking at a required contribution beyond our $31,000 amount. However, this would be an extreme situation. Staff also put together a table showing benefit levels over the years. The $560 increase is the largest I can recall. I will also add that increases have been pretty nominal for a number of years, so this increase provides a nice boost to the benefit level. Bolded numbers are the years increases took place. Year Pension Level 1999 2500 2000 2500 2001 2700 2002 2800 2003 2800 2004 2800 2005 2800 2006 2850 2007 3100 2008 3100 2009 3100 2010 3100 2011 3150 2012 3150 2013 3200 2014 3265 2015 3300 2016 3300 2017 3380 Staff recommends an increase in the benefit level for the Little Canada Fire Department of $560 pursuant to our contractual provisions.