Annual Financial Report 12/31/1988

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Page 14 of 19 CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1988 NOTE 2 DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) RETIREMENT - MULTIPLE EMPLOYER PERS (continued) The City made employer contributions of $51,120 (7.25%) of current covered payroll and employee contributions of $39,126 (5.55%) of current year covered payroll. The "pension benefit obligation" is a standardized disclosure measure of the present value of pension benefits, adjusted for the effects of projected salary increases and step -rate benefits, estimated to be payable in the future as a result of employee service to date. The measure, which is the actuarial present value of credited projected benefits, is intended to help users assess the PERA's funding status on a going - concern basis, assess progress made in accumulating sufficient assets to pay benefits when due, and make comparisons among Public Employees Retirement Systems and employers. The PERA does not make separate measurements of assets and pension benefit obligation for individual employers. The pension benefit obligations of the PERA as of June 30, 1988, were as follows: Public Public Employees Employees Retirement Fund Police and Fire (in $1,000) Fund (in $1,000) Total pension benefit obligation $3,334,423 $512,921 Net assets available for benefits, at market 2,749,289 584,871 Unfunded (assets in excess of) pension benefit obligation $585,134 ($71,950) The actuarial calculations of annual contributions include amounts that would be required to achieve full (100%) funding by the year 2009. Prior to fiscal year 1988, the mortality table used was the UP -2984 Unisex set forward one year for males and set back four years for females. For fiscal year 1988, the PERA Board of Trustees approved the use of the 1971 Group Annuity Mortality Table projected to 1984 for males and females. The change was made in order to reduce , if not eliminate, the series of large annually recurring mortality losses that have been realized in the last four years. With the adoption of the new mortality table, the projected benefit obligation increased $179,670,000 in the Public Employees Retirement Fund and $18,805,000 in the Public Employees Police and Fire Fund. The measurement of the pension benefit obligation is based on an actuarial valuation as of June 30, 1988. Net assets available to pay pension benefits were valued as of June 30, 1988. PERA does not make separate measurements for individual employers. The City of Lino Lakes made employer contributions totaling $49,595 which represent .05% of total contributions of all employers participating in the system ($98,218,000) for the year ended June 30, 1988. The City's contributions were made by the required due dates. Information on investment activity and a listing of specific investments of the PERA can be obtained by writing to the Minnesota State Board of Investment. Ten -year historical trend information is available in the published comprehensive annual financial report of the Public Employees Retirement Association.