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ELK RIVER MUNICIPAL UTILITIES <br />ELK RIVER, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2010 AND 2009 <br />Note 5: POSTEMPLOYMENT BENEFITS OTHER THAN PENSION -CONTINUED <br />Nealth insurance premiums - 2008 health insurance premiums for retirees were used as the basis for calculation of [he <br />present value of total benefits to be paid. <br />Withdrawal -The probability that an employee will remain employed until the assumed retirement age was determined <br />using non-group specific age-based turnover data provided in Table 1 in Paragraph 356 of GASB 45. <br />Disability -None <br />Actuarial Method -Projected Unit Credit with 30-year amortization of the unfunded liability. <br />Faluation date -January 1, 2008 <br />Based on [he historical and expected returns of the Utilities' short-term investment portfolio, a discount rate of 4.0 <br />percent was used. In addition, a simplified version of the entry age actuarial cost method was used. The unfunded <br />actuarial accrued liability is being amortized as a level dollar amount over an open basis. The remaining amortization <br />period at December 31, 2010, was thirty years. <br />-51- <br />