03-10-1993 Council Agenda - Laserfiche WebLink

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LITTLE CANADA FIREMEN'S RELIEF ASSOCIATION NOTES TO FINANCIAL STATEMENTS December 31, 1992 Page 8 of 9 C. FUNDING REQUIREMENTS The Volunteer Firefighter's Relief Association Financing Guidelines Act of 1971 (Chapter 261 as amended by Chapter 509 of Minnesota Statutes 1980) specifies minimum contributions required on an annual basis. The minimum contribution from the City of Little Canada is determined as follows: Normal Cost + Amortization Payment on Unfunded Actuarial Liability Prior to Any Change + Amortization Contribution on Unfunded Actuarial Liability Attributed to Any Change - Anticipated State Aid - Projected Investment Earnings 0 5% Total Contribution Required D. PLAN ASSETS Investments (other than U.S. Government or U.S. Government guaranteed obligations) in any one organization that exceed five percent of net assets available for benefits are as follows: Percent of Net Assets Available Amount for Benefits General Motors Acceptance Corp. 557,043 5.95% E. FUNDING STATUS AND PROGRESS The amount shown below as "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits estimated to be payable in the future as a result of service to date. The measure is the actuarial present value of accumulated plan benefits and is intended to help users assess the Little Canada Firemen's Relief Association funding status on a going - concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among public employee retirement systems. The measure is independent of the funding method used to determine contributions to the Little Canada Firemen's Relief Association. The pension benefit obligation was determined as of December 31, 1992 pursuant to State Statutes. Significant actuarial assumptions are as follows: The entry age normal cost method was used to determine the normal cost of all benefits. • The rate of investment return used in making the valuation was 5% per annum, compounded annually. Age and service retirement was assumed to occur at age 50. Page 40 M 1 1 1 1 1 1 p 1 1 1 1 1 1 p 1 1