C.A.F.R., FY 2008-09 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements September 30, 2009 V. Other Information Continued) I. Employee Retirement Systems and Plans (Continued) 1. Texas Municipal Retirement System (Continued) Benefits (Continued) Members an retire at certain ages, based on the years of service with the City. The Service Retirement Eligibilities for the City (expressed as years of service/age) are: 5 years/age 60 20 years/any age Contributions Under the state law governing TMRS, the contribution rate for each city is determined annually by the actuary, using the Projected Unit Credit actuarial cost method. This rate consists of the normal co t contribution rate and the prior service cost contribution rate, both of which are calculated o be a level percent of payroll from year to year. The normal cost contribution rate finances the portion of an active member's projected benefit allocated annually; the prior service co tribution rate amortizes the unfunded (overfunded) actuarial liability (asset) over the applicable period for that city. Both the normal cost and prior service contribution rates include re ognition of the projected impact of annually repeating benefits, such as Updated Service C edit and Annuity Increases. The employer contribution rate cannot exceed a statutory aximum rate, which is a function of the employee contribution rate and the city matching percentage. The prior service contribution rate amortizes the unfunded actuarial liability over the remainder of the plan's 25-year closed amortization period. Both the employees and the City make contributions monthly. Since the City needs to know its contribute rate in advance for budgetary purposes, there is a one-year delay between the actuarial v luation that serves as the basis for the rate and the calendar year when the rate goes into effect, For actuarial valuation, the market related method is used for assets. Other assumptio is include no cost-of-living adjustments, projected salary increases vary by age and service, in ation at 3%, and the investment rate of return is 7.5%. The level percent of payroll is the amo ization method used. During the past three fiscal years, the City has contributed 100% of its annual pension cost as follows: 2008 - $1,278,809, 2007 - $1,313,744, and 2006 - $1,188,241. At September 30, 2007, 2008, and 2009, the net pension obligation is zero. 51