1989 CAFR - Laserfiche WebLink

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CITY OF RAMSEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (Continued) December 31, 1989 Note 9. DEFINED BENEFIT PENSION PLANS - STATEWIDE (continued) The pension benefit obligations as of June 30, 1989, are shown below: PERF PEPFF (in Thousands) Total pension $ 3.714.2 5 7 $ 5 8 2.2 9 9 benefit obligation Net assets available for benefits, at cost (market values for PERF $3,801,129; PEPFF = $694,227) 2.934.977 637.868 Unfunded (assets in excess of) pension benefit obligation $779,280 $(55,5.69) The measurement of the pension benefit obligation is based on an actuarial valuation as of June 30, 1989. Net assets available to pay pension benefits were valued as on June 30, 1989. 2. Changes in Actuarial Methods and Benefit Provisions A number of benefit improvements became effective during fiscal year 1989. Some of the major improvements affecting each fund include a reduction in the period required for vesting from five years to three years; an option for members hired before July 1, 1989, to have their annuity calculated under a level benefit accrual formula; the interest rate credited on refunds of member contributions increased from 5% to 6%; and the provision for an automatic bounce back feature for all joint and survivor annuity options. In the PEPFF, age and/or service requirements were reduced for eligibility for a normal retirement annuity, an early retirement annuity, and for certain disability and survivor benefits. For each fund, there were changes in the actuarial assumptions used in the annual actuarial valuation. Effective for all funds beginning in fiscal year 1989, the pre-retirement interest rate assumption was increased from 8.0% to 8.5%. Additionally, for the PERF and the PEPFF, the amortization target date has been changed to 2020. Shown on the following page are the effects on the pension benefit obligation of these changes in plan benefits and actuarial assumptions. -3=-