4.3. & 4.4. SR 07-06-1998 - Laserfiche WebLink

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Proposal The Association is requesting that thc Council approve an increase of benefits for 1999 to $2970 for each year of service compared to $2674 for 1998. At the end of 1997, the City's auditor showed the Association's assets were 110 percent of their liabilities. In most cases, a surplus is desirable, but for the Relief Association a surplus is money that the members earned but cannot share. Only benefit levels approved by the Council may be paid to the membership. The Association has maintained a policy of calculating benefits based on 100 percent funding and has done that again for 1999. For the 1999 report, we have used a projection of the actual investment returns based on data available in May or 9% for the entire year. For the multi-year projection, we have estimated a 7 percent return on investments. In past years several members of the Council has expressed concern that the City might be liable for extra expense in the event that a series of extraordinary evems could happen. To address those concerns, the Association has completed a series of annual reports of the fund '~ Ixt, t' considers retirements, new members, and estimated income. A tabulation of the results of those reports follows: They show that not only are current benefit rates sustainable, they can also increase at approximately the rate of inflation. The ReliefAssociatlon history of benefit increases during the past years has always been consistent with income and have not placed any unusual liability on the City. TABULATION Year 1998 1999 2000 2001 2002 2003 Benefit 2674 2970 3080 3280 3475 3700 Surplus 104,000 1863 1117 482 891 1650 (Defici0 ASSUMPTIONS 7% Return on Fund 3% Yearly Increase in State Aid $20,150 Yearly Contribution From City with 3% yearly increase Two Retirements Even Years, One Odd Years 34 Member Total