Ord 1993-037 - Laserfiche WebLink

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) 2. ~D¡J City of San Marcos, Texas Exhibit 6 Notes to General Purpose Financial Statements (continued) September 30, 1992 4. Retirement Plan (continued) amounting to $471,394 (4.70% of covered payroll for the months in calendar year 1991, 3.66% normal cost plus 1.04% to amortize the unfunded actuarial liability, and 6.21 % for the months in calendar year 1992, 5.08% normal cost plus 1.13% to amortize the unfunded actuarial liability) for the City and $405,380 (5%) for the employees. The City adopted changes in the plan subsequent to the previous actuarial valuaÖon, which had the effect of increasing the City's contribution rate for 1992 by 1.46% of payroll. There: were no related party transactions. Funding Status and Progress Even though the substance of the City's plan is not to provide a defined benefit in some fonn, some additional voluntary disclosure is appropriate due to the nontradirionalnature .. of the defined contribution plan which had an initial unfunded pension benefit obligation due to the monetary credits granted by the City for services rendered before the plan began and which can have additions to the unfunded pension benefit obligation through the periodic adoption of increases in benefit credits and benefits. Statement No.5 of the Governmental Accounting Standards Board (GASB 5) defines pension benefit obligation as a standardized disclosure measure of the actuarial present value of pension benefits, adjusted for the effects of projected salary increases, estimated to be payable in the future as a result of employee service to date. The measure is intended to help users assess the funding status of public employee pension plans, assess progress made in accumulating sufficient assets to pay benefits when due,' and make comparisons among public employee pension plans. The pension benefit obligation shown below is similar in nature to the standardized disclosure measure required by GASB 5 for defined benefit plans except that there is no need to project salary increases since the benefit credits earned for service to date are not dependent upon future salaries. The calculations were made as part of the annual actuarial valuation as of December 31, 1991. Because of the money-purchase nature of the plan, the interest rate assumption, currently 8.5% per year, does not have as much impact on the results as it does for a defined benefit plan. Market value of assets is not determined for each city's plan, but the market value of assets for ThfRS as a whole was 114.1 % of book value as of December 31, 1991. -24-