Agenda - Council - 06/12/2018 - Laserfiche WebLink

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NOTE 10 — DEFINED CONTRIBUTION PENSION PLAN — FIRE RELIEF ASSOCIATION (CONTINUED) Firefighters also have the availability of other pensions such as deferred pension, disability pension, death benefits, and supplemental death benefits. Each of these other pensions are determined based on age and years of service C. Contributions Required and Contributions Made Contributions to the plan include State Fire Aid pursuant to Minnesota Statutes Chapter 69. In addition, the City is allowed to make voluntary contributions of other public funds pursuant to Minnesota Statutes Chapter 69. The City's contribution to the Association in 2017, including both city and state fire aid passed through the City totaled $175,678. This contribution represents nearly 74% of the current 2017 covered payroll of $238,439. There were no current year changes in plan provisions. NOTE 11— OTHER POST -EMPLOYMENT BENEFITS PLAN A. Plan Description The City provides post -employment healthcare benefits as required by Minnesota Statute 471.61 subdivision 2b. Active employees, who retire from the City when eligible to receive a retirement benefit from the Public Employees Retirement Association (PERA) of Minnesota and do not participate in any other health benefits program providing coverage similar to that herein described, will be eligible to continue coverage with respect to both themselves and their eligible dependent(s) under the City health benefits program. Retirees are required to pay 100% of the total group rate. Since the premium is a blended rate determined on the entire active and retiree population, the retirees, whose costs are statistically higher than the group average, are receiving an implicit rate "subsidy". The City has used the alternative valuation method set forth in GASB Statement No. 45 to determine the materiality of Other Post -Employment Benefits, OPEB. The plan does not issue a publicly available financial report. B. Funding Policy The required contribution is based on projected pay-as-you-go financing requirements. The City Council may change the funding policy at any time. C. Annual OPEB Cost and Net OPEB Obligation The City's annual OPEB cost (expense) is calculated based on annual required contributions (ARC) of the City, an amount determined on an actuarially determined basis in accordance with the parameters of GASB Statement Nos. 43 and 45. The ARC represents a level funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed 30 years. The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and the changes in the City's net OPEB obligation to the plan: 89