03-10-1993 Council Agenda - Laserfiche WebLink

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LITTLE CANADA FIREMEN'S RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS December 31, 1992 Pape 2 of 9 F. PENSION BENEFIT OBLIGATION The accrued pension liability at December 31, 1992 has been determined in accordance with Minnesota State Statutes 69.772 for Lump sum pension benefits. The benefits are payable after age 50; 20 years of service; and at least 10 years of Association membership. The amount payable is based on $2,000 for each year of service but not exceeding the maximum amount per year of service allowable by law for the minimum average amount of available financing per firefighter as prescribed by law. Note 2 "MEMORANDUM ONLY" PRESENTATIONS Presented in these financial statements are certain amounts labeled "memorandum only ". The reader is cautioned that this information has certain limitations. The "Total" column of the combined balance sheet presents a combining of unlike purpose funds and cannot be construed to be indicative of the overall financial position of the Association. Neither is such data comparable to a consolidation. Note 3 FUND REOIIIREMENTS Minnesota Statutes Chapter 69.772 specifies minimum support rates required on an annual basis. The minimum support rates from the municipality and from State aid are determined as the amount required to meet the normal cost plus amortizing any existing prior service costs over a 10 year period. The significant actuarial assumptions used to compute the municipal support are the same as those used to compute the pension benefit obligation. The contribution required by the municipality for any year is determined by deducting anticipated member contributions for the year and one year's estimated State aid expected from the State, pursuant to Minnesota Statutes, Chapter 69.772 from the total contribution required. Contributions totaling $32,971 ($12,000 City of Little Canada and $20,971 State of Minnesota) were made in accordance with State Statute requirements for the year ended December 31,1992. The contributions from the City of Little Canada and the State of Minnesota are intended to cover normal costs. Note4 CASH AND INVESTMENTS A. DEPOSITS Minnesota Statutes require that all deposits of the Relief Association be protected by insurance, surety bond, or collateral. The market value of the collateral pledged must equal 110% of the deposits not covered by insurance or bonds (140% in the case of mortgage notes pledged). Minnesota Statutes require that securities pledged as collateral be held in safekeeping by the treasurer or in a financial institution other than that furnishing the collateral. Authorized collateral includes the following: A) Certificates of deposit that are fully insured by federal agencies. B) Notes secured by first mortgages of future maturity, upon which interest is not past due, on improved real estate free from delinquent taxes, within the county wherein the depository is located, or within counties immediately adjoining the county in the State of Minnesota. Page 34