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) 1. Employee Retir ment Systems and Plans (Continued) 2. Firefighters' elief and Retirement Fund (Continued) Service Ret' ement Disabili and Death Benefits (Continued) his/her lifetime. An active member who becomes disabled will receive a monthly disability benefit. If member dies while in active service, his/her widow(er) will receive an immediate monthly benefit, payable for his/her lifetime. Annual Pens on Cost The actuarial valuation date used to determine the Annual Required Contribution for the year ended September 30, 2009, and the most current available information required for disclosure under Paragraph 22 of GASB Statement No. 27 is January 1, 2007. The actuarial cost method used in the January 1, 2007, valuation is the entry age normal actuarial cost method. This method is also referred to as the entry age actuarial cost method under the terminology developed y the Joint Committee on Pension Terminology. The valuation measures the actuarial balance between the present value of future benefits and the sum of (i) the present value of future contributions and (ii) the actuarial value of assets. The plan is not subject to the minimum finding requirements of Internal Revenue Code Section 412. There has been no change in the actuarial cost method since the last actuarial valuation. The actuarial assumptions used in the actuarial valuation performed as of January 1, 2007, include a rat of return on the actuarial value of assets of 8% per year compounded annually; UP 1994 Mortality Table; termination rates from the Actuary's Pension Handbook; disability rates from 1985 Society of Actuaries Disability Table Study; and assumed retirement age of 55 with 20 years of service or satisfied the rule of 80. Compensation increases for individual members and total payroll is 4.5% compounded annually. Projected post retirement benefit increases are zero. The amortization of the unfunded actuarial accrued liability was determined as a level percentage of payroll. The amortization period is an open amortization period over 25.1 years. The actuarial value of assets is smoothed market value which smoothes interest and dividends as well as investment gains and losses. Calculation of the actuarial value of assets begins with an "initial asset value." The initial asset value is the market value of assets five years prior to the valuation date. All receipts fro contributions, interest, dividends, and miscellaneous income over the last five years are ad led to the initial asset value. Likewise, all benefit payments, contribution refunds, and expenses are subtracted from the initial asset value. In this manner, all such receipts and disbursements are recognized immediately. 54