1988 CAFR - Laserfiche WebLink

Home

CITY OF RAMSEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS (Continued) December 31, 1988 Note 9. DEFINED BENEFIT PENSION PLANS - STATEWIDE (continued) C. Funding Status and Progress 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 obligations for individual employers. The pension benefit obligation of the PERA as of June 30, 1988, was as follows: Total pension benefit obligation Net assets available for benefits, at market Unfunded Pension Benefit Obligation Public Employees' Retirement Fund (in Millions) $3,334 2,749 $ 585 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. D. Change in Actuarial Methods Prior to fiscal year 1988, the mortality table used was the UP -1984 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. These actuarial changes did not affect the contribution rates.