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<br />Funding Ratios <br /> <br />Funding ratios explain 110\V "Tell funded a plan is by sllo\v~ing tlle relationship bet\veen its <br />assets and liabilities. Higll ratios can reflect lo\v benefit lev.els in cOlnparison to pension plan <br />surpluses. La\v ratios may signal tlle need for greater contributions. The ERFD relief Board <br />belie.v.es dlat it has fiduciary responsibilities to bodl tlle lnelnbership and to tlle Council. Tile <br />responsibility to tlle membership is to seek tlle hig1lest financially sound benefit le"vel. TIle <br />responsibility to tlle Council is to not expose tlle city to any financial risk associated "Tidl <br />mandatory contributions. TIle board believes tllat a funding ratio around one Ilundred <br />percent represents tllat unportant balance.' One hundred percent means tllat tllere exists an <br />asset dollar for e\Te11T dollar of liability. <br /> <br />Action Requested <br /> <br />TIle .L'\ssociation is requesting tllat tlle Council appro've an increase in the benefit le\Tel for <br />2007 to $4,450 per eacll year of service. LTsing tlle State schedules ,ve project tlle 2007 <br />increase to be 1000/0 funded. <br /> <br />Since tlle State of rvlinnesota pro'vides tlle basic funding for relief association, t1le State <br />.l~uditor lnaintains strict o'versight of tile lnanagelnent of funds tlltougll reporting and <br />statutes. By ..A..ugust 1 st eacIl year, all.i\ssociations lnust file reports dlat estimate dle llCOlne <br />for tlle prior year and cOlnpare tlle income to tlle acclued liability of tlle fund. <br /> <br />TIle Relief .L~ssociation luelubership tllanks tlle Council for its past and future support. <br />