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' <br />CITY OF ELK RIVER, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br /> <br />DECEMBER 31, 2007 ' <br />Note 4: OTHER INFORMATION -CONTINUED ' <br />b. Funding Policy <br />The fmancial requirements of the Special fund are determined in accordance with Section 69.772 of the ' <br />Minnesota Statutes, which requires the payment of pension benefits in a lump sum or optionally in annual <br />installments. The Association is comprised of volunteers and therefore members have no contribution <br />requirements. During the year, The City recognized as revenue and as an expenditure on-behalf payments of <br /> <br />$129,223 made by the State of Minnesota for the Fire Relief Association. The following summarizes the City's ' <br />annual pension cost and other related information For the current year: <br />Annual pension cost $129,223 <br />Contributions made: <br />City (voluntary) $29,800 , <br />State aid $129,223 <br />Actuarial valuation dace 12/31/07 , <br />Actuarial cost method Entry age normal <br />Amortization method Level dollar closed , <br />Remaining amortization period: <br />Normal cost 20 years ' <br />Prior service cost 5 years <br />Asset valuation method Market , <br />Actuarial assumptions: <br />Investment rate of return 5% <br />Projected salaryincreases N/A <br /> <br />Inflation rate N,~A ' <br />Cost of living adjustment None <br /> <br />Three-Year Trend Information <br />Annual Percentage Net <br />Year Pension of APC Pension <br />Endine Cost APC) Contributed * Obli a~ tion <br />12/31/05 $ 136,429 121% $ - <br />l2/31/06 148,455 120% - <br />]2/3]/07 129,223 123% - <br />* The City has made excess voluntary contributions which may not be used to offset ' <br />actuarially required amounts, resulting in a percentage of APC contributed over 100%. <br />The excess contributions will be used for future benefits <br />. ' <br />1 <br />60 ' <br />