5.2. SR 07-12-1999 - Laserfiche WebLink

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. Note 3: . Note 4: . JUL-08-1999 THU 11:00 AM CRETEX PURCHASING FAX NO, 6122418210 ^ 11 J4Crl VVt v-.rrp ELK RIVER FIRE DEPARTMENT RELIEF ASSOCIATION ELK RIVER, MINNESOTA NOTES TO FINANCIAL 5T A TEMENTS DECEMBER 31, 1998 FUNDING STATUS AND PROGRESS p, 11/12 .5 Presented below is the total pension benefit obligation of the Elk River Fire Department Relief Association. The amount of the total pension benefit obligation is based on a standardized measurement established by the Govel1lmcntal Accounting Standards Board (GASB) that, with some exceptions, must be used by the relief associations for financial statement presentation. "hc standardized measurement is the actuarial present vallie of credited projected benefits. This pension valuation method reflects the present vallie of estimated pension benetits that will be paid in future years as a result of employee services perfomled to date. ^ standardized measure of the pension benefit obligation was adopted by GASa to enable the readers ofreliefassociation financial statemCI1!S to (a) assess the reliefassoeiation's funding status on a going-concern basis, (b) assess progress being made in accumulating sufficient assets to pay benefits when due, and (e) make comparisons among rclief associations. Because the standardized measure is used only for disclosure purposes by the Elk River Fire Department Relief Association, the measurement is independent of the actuarial computation made to determine contributions to the Relief Association. The standardized measure of the funded pension benefit obligation as of December 31, 1998 is: Pension Benefit Obligation Retirees and beneficiaries currently receiving benefits and terminated employees not yet receiving benefits Current members Vested benefits Non-vested members $ 77,436 Total pension benefit obligation Net assets available for benefits, at market 1,054,679 23.852 1,155,967 . 1.390.291 .- _.------- C ~~4.32~) Net assets ill excess of pension benefit obligation The total pension benefit obligation as of December 31, 1997 was $1,088,123. During the year, the plan experienced an increase of $67,844 or 6.2% in the pension benefit obligation. The current benefit level as of December 31, 1998 is $2,<i74. The benefit level was increased to $2,900 effective for 1999. This resulted in an increase in pension benefit obligation of $89,589. The financial requirements of the Special Fund are determined in accordance with Section 69.772 of the Minnesota Statutes, which requires the payment of pension benefits in a lump sum or optionally in annual installments. The Association benefits arc payable in a lump sum after age SO, 20 years of service or upon death. Benefits are accumulated at $2,674 and $2,500 per year of active service for 1998 and 1997, respectively. The accI:Ucd liability for these accumulated benefits is computed using increasing percentages based on years of service in accordance ~ith subdivision 2 of Section 69.772, At 20 years of service, the liability is equal to the number of years of service times benefits per year. Association members are vested after 5 years. CONTRIBUTIONS REQUIRED AND CONTRIBUTIONS MADE The total contribution, which was not acruarially dcterm ined, in 1998 amounted to $79,502 of which $20.1 SO was contributed by a City tax levy and $59,325 was from State of Minnesota Aid.