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1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />LITTLE CANADA FIREMEN'S RELIEF ASSOCIATION <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 1990 <br />Note 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) <br />DONATIONS <br />Page 2 of 8 <br />Special Fund (Pension Trust) - The donations of the Special Fund consist of monies received from the <br />Little Canada Fire Department to be used for pension benefits. <br />ACTUARIAL PRESENT VALUE OF PENSION BENEFIT OBLIGATION <br />The accrued pension liability at December 31, 1990 has been determined in accordance with Minnesota <br />State Statutes 69.772 for lump sum pension benefits. The benefits are payable after age 50; 20 years <br />of service; and at least 10 years of Association membership. The amount payable is based on 51,800 <br />for each year of service but not exceeding the maximum amount per year of service allowable by law <br />for the minimum average amount of available financing per firefighter as prescribed by law. <br />Note2 "MEMORANDUM ONLY" PRESENTATIONS <br />Presented in these financial statements are certain amounts labeled "memorandum only ". The reader is <br />cautioned that this information has certain limitations. The "Total" column of the combined balance <br />sheet presents a combining of unlike purpose funds and cannot be construed to be indicative of the <br />overall financial position of the Association. <br />Note3 FUND REOUTREMENTS <br />The Little Canada Firemen's Relief Association funding policy provides for contributions from the <br />State of Minnesota and the City of Little Canada in amounts sufficient to accumulate sufficient assets <br />to pay benefits when due. The unfunded liability is amortized over a period of 10 years. The <br />significant actuarial assumptions used to compute the municipal support are the same as those used to <br />compute the pension benefit obligation. <br />Contributions totaling 541,776 (520,888 City of Little Canada and 520,888 State of Minnesota) were <br />made in accordance with State Statute requirements for the year ended December 31, 1990. The <br />contributions from the City of Little Canada and the State of Minnesota are intended to cover normal <br />costs. <br />Note4 CASH AND INVESTMENT$, <br />DEPOSITS <br />Minnesota Statutes require that all deposits of the Relief Association be protected by insurance, surety <br />bond, or collateral. The market value of the collateral pledged must equal 110% of the deposits not <br />covered by insurance or bonds (140% in the case of mortgage notes pledged). <br />Authorized collateral includes the legal investments described below, as well as certain first mortgage <br />notes and certain other state or local government obligations. Minnesota Statutes require that securities <br />pledged as collateral be held in safekeeping by the treasurer or in a financial institution other than that <br />furnishing the collateral. <br />At December 31, 1990, the carrying amount and bank balance of the Relief Association's deposits were <br />58,640 all of which were covered by federal depository insurance. <br />Page 68 <br />