Police Pension Packet 2009 11-10-09 Yorkville Police Pension Fund Board
804 Game Farm Road
Yorkville, 1160560
(630) 553-4340
5:00 PM on November 101 2009
Police Department Conference Room
Agenda
Meeting Call to Order:
Roll Call:
Previous Meeting Minutes: August 25, 2009
Communications:
On Aug 27°i $60,000.00 was transferred from checking to the Schwab account.
On Sept 30th $125,000.00 was transferred from checking to the Schwab account.
Monthly Treasurer's Report: as of Oct 31, 2009
Bills for Payment:
MVT management fees:
From Schwab ##3137-9036 (Oct) $3603.00
Cary Collins: Attorney (Oct-Dec 09) $ 650.00
Kelly Zabinski IDOI filing: Partial Payment $ 123.69
William Powell S 575.00
Total Bills for Payment: $4951.69
Investments:
Money transfers from YNB to Charles Schwab & Co
Pay to: Charles Schwab & Co.
Mail to: Institutional Client Service Group
P. O. Box 628290
Orlando, F132862-9906
Prog=ress Reports from Mitchell, Vaught, and Taylor
Unfinished Business:
IDOI Filing progress: IDOI filing was completed on Oct 27, 2009. It has been forwarded to Tim Sharp.
SB 1974: Annual Training for Pension Board Trustees
House Bill 4603: Creditable Service: Buyback Letters for file. Officer Pleckham will followup.
Illinois Public Pension Fund Association membership (1PPFA)
Discussion of the Investment Policy and the Rules and Regulations
New Business:
Additional Business:
Next meeting:
Motion to Adjourn:
Year 2009 Meeting Dates: Feb 10, May 21, Aug 11, Nov 10
Yorkville Police Pension Fund Board
804 Game Farm Road
Yorkville, Il 60560
(630) 553-4340
5:OOPM on Aug 25, 2009
Police Department Conference Room
Minute (Approved: Nov. 10 2009
Attachments:
Meeting Minutes for June 2, 2009
Monthly Treasurer's Report as of July 31, 2009
Bills for Payment
Meeting Call to Order: The meeting was called to order at 5:12PM
Roll Call: Present: Chief Martin, Officer Pleckham, Mr. Dusell, Mr. Overmyer, Treasurer Powell
Guests: Attorney Collins, Dwight Owen(MVT),Larry Debord(MVT)
Previous Meeting Minutes: June 2, 2009
Corrections/Approval:None
Motion to Approve: A motion was made by Chief Martin(2°d Mr. Dusell)to approve the minutes as read.
Ayes—3, Nays -0
Communications:
At the June 2°d meeting the Public Pension Funds Compliance Fee of$526.31 was paid on check#202.
Monthly Treasurer's Report: as of July 31, 2009
The monthly Treasurer's report was submitted showing total assets as of July 31, 2009 to be$3,008,451.71.
The equity investment portion represents 43.2%that is within the 45% guideline.
The cash balance at Old Second Bank was $90,875.71 with an expected additional$12,148.51 to be received from
the tax levy at tonight's City Council meeting.
Tax Levy:The tax levy for 2008 (to be collected in 2009)is $325,000.00
Date Received Amount
7131109 $34,032.42
8125109 $12,148.51
Chief Martin requested a report on the tax levy funds received from the City.Mr Powell will follow up.
Motion to Approve: A motion was made by Chief Martin(2°d Officer Pleckham)to approve the Treasurer's
report as read. Ayes—3, Nays-0
Bills for Payment:
MVT management fees:
From Schwab#3137-9036 (Jan-April) $6258.00
Cary Collins:Attorney(July-Sept 09) $650.00
Tim W. Sharp Actuary(check#204) $1500.00
Kelly Zabinski IDOI filing:Partial Payment $650.00
IDOI Compliance Fee: (Check#202 $526.31
Dan Pleckham:Conference Fee $100.00
William Powell $262.50
Total Bills for Payment: $9946.81
Motion to Approve:A motion was made by Chief Martin(2nd Officer Pleckham)to approve the bills for payment.
Ayes—3, Nays-0
Investments: As of 8-25-09 the checking account balance is $104,761.72 with an anticipated additional $12,148.51
from the city. Per standing board direction funds in excess of$40,000.00 will be transferred from Old Second to the
Schwab accounts and reported at the next board meeting.
Money transfers from YNB to Charles Schwab &Co
Pay to: Charles Schwab & Co.
Mail to: Institutional Client Service Group
P. 0. Box 628290
Orlando, F132862-9906
Progress Reports from Mitchell, Vaught, and Taylor
Mr. Ower and Mr. Debord submitted a Quarterly Report for the 2°d quarter of 2009 ending June 30, 2009.
At that time the fund had a balance of$2,791,777 with a net investment gain for the quarter of$178,777. The
gain since March 31, 2006 is $114,888. Management fees for the quarter are shown as $3,086.
Motion to Approve:A motion was made by Chief Martin(2°d Mr. Overmyer)to accept the report.
Ayes—4, Nays - 0
Unfinished Business:
IDOI Filing progress:
Mr Powell reported that a preliminary report had been received from Kelly Zabinski and was forwarded
to the auditor for their review.
SB 1974: Annual Training for Pension Board Trustees
Officer Pleckham to report on the June 4 c and 5,h conference.
HB 1974 requires 32 hours of training for trustees appointed after Aug 13, 2009 and 16 hours of
annual training for all trustees. The deadline for receiving training is April 3, 2010. Attorney Collins
mentioned that a group is trying to establish several training sessions and possibly a webcast session
to provide this iraining.
Illinois Public Pension Fund Association membership (IPPFA)
IPPFA and IPAC were discussed. After much discussion this item has been tabled to a
later date.
House Bill 4603: Creditable Service: Buyback Letters for file. Officer Pleckham will follow up.
Attorney Collins stated that his office would provide a certification form for the individuals that
received buyback funds. He also mentioned that this information should be sent to IDOL
Officer Pleckham to review personnel files: The review is in progress.
Officer Pleckham mentioned that files are being updated and this is a constant process.
Discussion of the Investment Policy and the Rules and Regulations
The Investment Policy will be reviewed at the Jan 2010 meeting.
New Business: None
Additional Business: None
Next meeting: The next meeting is scheduled for Nov 10, 2009 at 5:00PM.
Motion to Adjourn: A motion was made by Chief Martin(2nd Officer Pleckham)to adjourn at 6:03PM75
Ayes--4, Nays -0
Year 2009 Meeting Dates: Feb 10, May 21, Aug 11,Nov 10 file:PolicelagcndalmimAes Aug 11 2009.doc
w c1ry0 United City of Yorkville
.� 800 Game Frame Road
Yorkville, Illinois 60560
EST. = 1836 Phone 630-553-1887
Fax: 630-553-7575
,.DXM
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Treasurer's Report
(As of Oct 31, 2002)
Dollars Percent
Cash: YNB (1) 193,670.01
Schwab (Includes 12,172.55 cash accrued) 220,199.00 _
Total Cash: $413,869.01 12.3%
Schwab: 3
Fixed Securities: 1,494,603.00 44.2%
Equities: 2 1,476,463.00 43.5%
Total Assets: 3,384,935.01 100.00%
2008 Tax Levy Estimate: $325,000.00
Tax Levy monies received:
9111109 $122,044.66
Estimated monthly deposits: $15,000.00
Estimated monthly retiree payments: $ 9500.00
William Powell
Treasurer
United City of Yorkville
(l) The board has established a$40,000.00 minimum balance
(2) The maximum equity percent is 45%by statue
(3) Schwab accounts rounded to the nearest dollar.
File:T Report 103I09.doc
Wt;;v Offices of Cary J. Collins, P.C. Invoice
2200 West Higgins Road Suite 155
Hoffinan Estates, TL 60169 Date Invoice#
Telephone 847-519-0010 Fax 847-519-0016 9/15/2009 5114
Bill To
Yorkville Police Pension Board
Atten:Chief Harold Martin
804 Game Farm Road
Yorkville IL 60560
Terms
Due on receipt
Description Amount
Quarterly retainer for the months of 650.00
OCTOBER,NOVEMBER&DECEMBER,2009
Total $650.00
Please make checks payable to the LAW OFFICES OF CARY J.COLLINS payments/Credits
$0.00
Balance Due $650.00
.. Zabinski Consulting Services, Inc. Invoice
P.O. Box 6534
Aurora, IL 60598-6534
Invoice#: 523
Invoice Date: 6/30/2009
Due Date: 7/30/2009
Bill To:
Yorkville Police Pension Fund
Attn: Mr.William Powell
800 Gamefarm Road
Yorkville, IL 60560
Description Amount
Progress billing for the annual Illinois Department of Insurance filing 650.00
for fiscal year ended April 30, 2009.
Total $650.00
Phone# Payments/Credits $-526.31
(630)939-7668 Balance Due $123.69
LR) t L 1 f c cti? C L Lam.
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Agenda, Meeting Mintues
Employee contributions, YNB Bank, Merrill Lynch data entry
Quarterly member contributions letters
State of Illinois intemet filing for fiscal year end
file: Police Pension Time Log.xls
Wolf&r Company LLP Xl\/Ir
PJ A Waif Financial Group Member
C�•rtifi<•r� l�rr�i(r� flrcerrilrrrtl
UNITED CITY OF YORKVILLE
800 GAME FARM ROAD
YORKVILLE, IL 60560
Invoice No. 79792
Date: Friday, October 30, 2009
Client No. 47541
PLEASE RETURN A COPY OF THIS INVOICE WITH YOUR REMITTANCE
Professional services rendered re:
Final progress billing for audit services for the fiscal year
ended April 30, 2009. $ 10,000.00
For audit services of the Police Pension Fund for the
fiscal year ended April 30, 2009, 3,150.00
Review and adjustments to capital asset balances. 5,195.00
Analysis and adjustments of interfund activity. 3,310.00
Review other commitment liabilities and adjust for current
year activity. 1,820.00
Additional work related to Police Pension investments. 880.00
Reconciliation assistance and review of the following:
Recreation Center lease, deferred revenue, and fund
balance analysis. 715.00
$_ 25 070.00
NET 30 DAYS
Interest is charged on all balances over 30 days at an annual rate of 18%
2100 Clearwater Drive Oak Brook,Illinois 60523-1927
630.545.4500 main . 630.574.7818 fax www.wolfcpa.com
UNITED CITY OF YORKVILLE,ILLINOIS
Notes to the Financial Statements 0
Apri130,2009
3. Deposits and Investments(Cont.)
B. Investments(excluding Pension Trust Fund)(Cont.)
,Interest Rate Risk. The City's policy states that a variety of financial instruments and maturities,
properly balanced, will help to insure Iiquidity and reduce risk or interest rate volatility and loss of
principal. The policy does not state specific limits in investment maturities as a means of managing
its exposure to fair value losses arising from increasing interest rates.
Credit Risk. Investments shall be made with judgment and care,under circumstances then prevailing,
which persons of prudence, discretion, and intelligence exercise in management of their own affairs,
not for speculation, but for investment, considering the safety of their capital, as well as the probable
income to be derived. The standard of prudence to be used by investment officials shall be the
`prudent person' standard and shall be applied in the context of managing an overall portfolio.
Custodial Credit Risk. For deposits and investments, custodial credit risk is the risk that,in the event
of the failure of the counterparty,the City will not be able to recover the value of its investments or
collateral securities that are in the possession of an outside party. The City's investment policy
requires that all amounts in excess of any insurance limits be collateralized by approved securities or
surety bonds issued by top-rated insurers, having a value of at least 110%of the deposits. Collateral
is required as security whenever deposits exceed the insurance limits of the FDIC. Repurchase
agreements must also be collateralized in the amount of 105% of market value of principal and
accrued interest. Collateral shall be held at an independent,third party institution in the name of the
City. The third party institution shall comply with all qualifications and requirements as set forth in
the Illinois Complied Statutes 30 ILCS 23516.
Concentration of Credit Risk. The City's policy states that a variety of financial instruments and
maturities, properly balanced, will help to insure liquidity and reduce risk or interest rate volatility
and loss of principal. Diversifying instruments and maturities will avoid incurring unreasonable risks rM
in the investment portfolio regarding specific security types, issuers or individual financial
institutions. The City shall diversify to the best of its ability based on the type of funds invested and
the cash flow needs of those funds. The City places no limit on the amount the City may invest in any
one issuer.
C. Police Pension Investments
The Pension Trust Fund is authorized to invest in investments permitted under Section 3-135 of the
Illinois Police Pension Code (40 ILCS 511101), which includes the following: (1) interest-bearing
bonds or tax anticipation warrants of the United States, of the State of Illinois, or of any county,
township or Municipal Corporation of the State of Illinois; (2) insured withdrawable capital accounts
of State chartered savings and loan associations; (3) insured withdrawable capital accounts of federal
chartered savings and loan associations if the withdrawable capital accounts are insured by the
Federal Savings and Loan Insurance Corporation; (4)insured investments in credit union; (5)savings
accounts or certificates of deposit of national or state banks; (6)securities described in Section 1-113
of the Illinois Code; (7) contracts and agreements supplemental thereto providing for investments in
the general account of a life insurance company authorized to do business in the State of Illinois; (8)
separate accounts of a life insurance company authorized to do business in Illinois, comprised of
common or preferred stocks,bonds,or money market instruments;and (9)Federal National Mortgage �a[
Association(FNMA)and Student Loan Marketing Association(SLMA).
36
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9
UNITED CITY OF YORKVU LE,ILLINOIS
Notes to the Financial Statements
April 30,2009
3. Deposits and Investments(Cont.)
C. Police Pension Investments(Cont.)
The Pension Trust Fund's primary objective in dealing with investments is safety, liquidity, and
return on investments. Safety is the foremost objective and investments shall be undertaken in a
manner that seeks to insure the preservation of the capital. The investment portfolio shall remain
sufficiently liquid to enable the Fund to meet all operating requirements that might be reasonably
anticipated. Assets will be invested to achieve attractive real rates of return.
The following schedule reports the fair values and maturities for Pension Trust Fund's investments at
April 30,2009:
Investment Maturities
Fair Less Than 1 to 5 6 to 10 More Than
i Investment Type Value One Year Years Years 10 Years
Fixed Income Securities
U.S.Treasuries $ 369,167 121,568 51,625 195,974
Federal Home Loan Mortgages 349,888 148,248 201,640
Federal National Mortgage 433,193 349,059 84,134
Federal National Mortgage
Association 173,158 173,158
Government National Mortgage
I Association 69,893 69,893
Total Fixed Income Securities 1,395,299 269,816 400,684 397,614 327,185
I Mutual Funds 1,116,591
Money Market Funds 159,928
Total Investments $ 2,671,818
I Interest Rate Risk, The Pension Trust Fund's investment policy states that no more than 5% of plan
assets shall be invested in illiquid, long-term investments. Such investments may include certificates
of deposits and guaranteed insurance contracts. Any other plan holding which would have a
noticeable impact on market price in whole or in part is also defined as illiquid.
Credit Risk. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill
I its obligations. The Pension Trust Fund helps limit its exposure to credit risk by primarily investing
in securities issued by the United States Government and/or its agencies that are implicitly guaranteed
by the United States Government. The investments in the securities of the United States Government
agencies were all rated Triple A by Standard & Poor's and by Moody's Investor Services. The
Pension Trust Fund's policy prescribe to the"prudent person"rule which states,"Investments shall be
made with judgment and care, under circumstances then prevailing, which persons of prudence,
discretion and intelligence exercise in the management of their own affairs, not for speculation, but
for investment, considering the primary objective of safety as well as the second objective of the
attainment of market rates of return."
37
UNITED CITY OF YORKVILLE,ILLINOIS
Notes to the Financial Statements
April 30,2009
3. Deposits and Investments(Cont) E
C. Police Pension Investments(Cont.)
Custodial Credit Risk. For an investment, custodial credit risk is the risk that, in the event of the
failure of the counterparty, the Pension Trust Fund will not be able to recover the value of its
investments or collateral securities that are in the possession of an outside party. The Pension Trust
Fund's investment policy does not state specific collateral requirements.
Concentration of Credit Risk. There is a risk of loss attributed to the magnitude of the Fund's
investment in a single issuer. The Fund does not have a formal policy with regards to concentration
risk for investments. As of April 30, 2009, the Pension Trust Fund had over 5% of net plan assets
invested in various agency securities or equities as listed below. Although agency investments
represent a large portion of the portfolio, the investments are diversified by maturity dates and are
backed by the issuing organization.
The following investments exceeded 5%of Pension Fund investments: E
Percent of
Description Amount Investments
Equities
Selected American Shares $ 129,787 5.17%
T Rowe Price New America Growth Fund 128,123 5.10%
6
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UNITED CITY OF YORKVILLE,ILLINOIS
Notes to the Financial Statements(Cont.)
April 30,2009
9. Defined Pension Benefit Plans
A. Illinois Municipal Retirement Fund
Plan Description
The City's defined benefit pension plan, Illinois Municipal Retirement (IMRF) provides retirement,
disability, annual cost-of-living adjustments and death benefits to plan members and beneficiaries.
EARF is an agent multiple-employer pension plan that acts as a common investment and
administrative agent for local governments and school districts in Illinois. The Illinois Pension Code
establishes the benefit provisions of the plan that can only be amended by the Illinois General
Assembly. IMRF issues a publicly available financial report that includes financial statements and
required supplementary information. That report may be obtained by writing to the Illinois Municipal
Retirement Fund,2211 York Road, Suite 500, Oak Brook,Illinois 60523, or on-line at www.imrf.org.
Funding Policy
Employees participating in IMRF are required to contribute 4.50% of their annual covered salary.
State statutes require employers to contribute the amount necessary, in addition to member
contributions, to finance the retirement coverage of its own employees. The employer rate for
calendar year 2008 was 7.78% of payroll. The City also contributes for disability benefits, death
benefits and supplemental retirement benefits, all of which are pooled at the EVIRF Ievel. The
employer contribution requirements are established and may be amended by the IMRF Board of
Trustees,except for the supplemental retirement benefit rate which is set by State statute.
Annual Pension Cost
For December 31, 2008, the City's annual pension cost of$287,422 was equal to the City's required
and actual contributions. The required contribution was determined as part of the December 31,2006
actuarial valuation using the entry age actuarial cost method. The actuarial assumptions included(a)
7.50% investment rate of return (net of administrative expenses); (b) projected salary increases of
4.00% a year attributable to inflation; (c) additional projected salary increases ranging from 0.4% to
11.6%per year depending on age and service, attributable to seniority/merit; and(d)post-retirement
benefit increases of 3% annually. The actuarial value of IMRF assets was determined using
techniques that smooth the effects of short-term volatility in the market value of investments over a
five-year period with a 20% corridor between the actuarial and market value of assets. The City's
N unfunded actuarial accrued liability is being amortized as a level percentage of projected payroll on a
closed basis. The remaining amortization period at December 31,2008 valuation was 24 years.
r
Funded Status and Funding Progress
As of December 31, 2008, the most recent actuarial valuation date, the Regular plan was 84.16%
` funded. The actuarial accrued Iiability for benefits was $4,949,634 and the actuarial value of assets
was $4,165,811, resulting in an underfunded actuarial accrued liability (UAAL) of$783,823. The
covered payroll (annual payroll of active employees covered by the plan) was $3,694,367 and the
ratio of UAAL to the covered payroll was 21.22%.
The schedule of funding progress, presented as Required Supplementary Information following the
Notes to the Financial Statements, presents multi-year trend information about whether the actuarial
value of plan assets is increasing or decreasing over time relative to the actuarial accrued liability of
benefits.
57
Z
UNITED CITY OF YORKVILLE,ILLINOIS
Notes to the Financial Statements(Cont.)
April 30,2009
9. Defined Pension Benefit Plans(Cont.)
B. Police Pension
During fiscal year 2002, the City and members of the police force began making contributions to the
newly formed Police Pension Fund. The following is a description of the plan:
Plan Description:
Police sworn personnel are covered by the Police Pension Fund, which is a defined benefit single-
employer pension plan. Although this is a single-employer pension plan, the defined benefits and
employee and employer contributions levels are governed by Illinois Compiled Statutes
(40 ILCS 513)and may be amended only by the Illinois legislature. The City accounts for the plan as
a pension trust fund. At April 30,2007,the Police Pension Fund membership consisted of:
Retirees and Beneficiaries Currently Receiving Benefits
and Terminated Employees Entitled to Benefits but Not
Yet Receiving Them 0
Current Employees '
Vested 12
Nonvested 16
Total ?& I
The following is a summary of the Police Pension Fund as provided for in Illinois Compiled Statutes. r
The Police Pension Fund provides retirement benefits as well as death and disability benefits.
Employees attaining the age of 50 or more with 20 or more years of creditable service are entitled to
receive an annual retirement benefit of one-half of the salary attached to the rank held on the last day
of service, or for one year prior to the Iast day, whichever is greater. The pension shall be increased
by 2%of such salary for each additional year of service over 20 years up to 30 years,and 1%of such
salary for each additional year of service over 30 years, to a maximum of 75% of such salary.
Employees with at least 8 years but less than 20 years of credited service may retire at or after age 60
and receive a reduced benefit.
The monthly pension of a police officer who retired with 20 or more years of service after January 1,
1977,shall be increased annually, following the first anniversary date of retirement and be paid upon
reaching the age of at least 55 years, by 3% of the original pension and 30/c simple interest annually
thereafter.
Summary of Significant Accounting Policies and Plan Asset Matters
Basis of Accounting— The financial statements are prepared using the accrual basis of accounting.
Employee contributions are recognized as additions in the period in which employee services are '
performed.
Method Used to Value Investments—Investments are reported at fair value. Short-term investments '
are reported at cost, which approximates fair value. Investment income is recognized when earned.
Gains and losses on sales and exchanges of fixed-income securities are recognized on the transaction
date.
58
UNITED CITY OF YORKVILLE,ILLINOIS
Notes to the Financial Statements(Cont.)
April 30,2009
9. Defbed Pension Benefit PIans(Cont.)
B. Police Pension(Cont.)
Contributions
Covered employees are required to contribute 9.91% of their base salary to the Police Pension Fund.
If an employee leaves covered employment with less than 20 years of service, accumulated employee
contributions may be refunded without accumulated interest. The City is required to contribute the
remaining amounts necessary to finance the plan as actuarially determined by an enrolled actuary at
the Illinois Department of Insurance. Future administrative costs are expected to be financed through
investment earnings.
C. Annual Pension Costs
Employer contributions have been determined as follows:
Illinois
Municipal Police
Retirement Pension
Actuarial Valuation Date December 31, May 1,
2008 2007
Actuarial Cost Method Entry Age Entry Age
Normal Normal
Asset Valuation Method 5 Year Market
Smoothed Market
Amortization Method Level Percentage Level Percentage
of Payroll of Payroll
Amortization Period 24 Years 30 Years
Closed Closed
3
59
UNITED CITY OF YORKVILLF.,ILLINOIS
Notes to the Financial Statements(Cont.)
April 30,2009
9. Defined Pension Benefit Plans(Cont.)
C. Annual Pension Costs(Cont.)
Illinois
Municipal Police
Retirement Pension
Significant Actuarial Assumptions:
a) Rate of Return on Present and Future 7.50% 7.50% E
Assets Compounded Compounded
Annually Annually
b) Projected Salary Increase-Attributable 4.00% 5,50%
to Inflation Compounded Compounded
Annually Annually E
c) Additional Projected Salary Increases- .40%-11,6% Not Available
Seniority/Merit
The net pension obligation is the cumulative difference between the APC and the contributions
actually made. Employer annual pension costs (APC), actual contributions and the net pension
obligation(NPO)are as follows:
Illinois
Illinois
Calendar Municipal Fiscal Police
Year Retirement Year Pension
Annual Pension Cost(APC) 2006 $ 202,667 2006 231,960 LN
2007 248,944 2007 231,991
2008 287,422 2008 NIA
Actual Contribution 2006 202,667 2006 231,124
2007 248,944 2007 248,988
2008 287,422 2008 275,144
Percentage ofAPC 2006 100% 2006 99.6%
Contributed 2007 100% 2007 107.3%
2008 100% 2008 NIA
Net Pension Asset(Obligation) 2006 2006 (836)
2007 2007 16,161
2008 2008 NIA
NIA--No actuarial valuation was performed for fiscal year 2009. re
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UNITED CITY OF YORKVILLE,ILLINOIS
Notes to the Financial Statements(Cont.)
April 30,2009
9. Defined Pension Benefit Plans(Cont)
C. Annual Pension Costs(Cont.)
The net pension asset(obligation)has been calculated as follows:
Police
Pension
Annual Required Contributions $ 231,960
Interest on Net Pension Obligation 63
Adjustment to Annual Required Contribution 43,121
Annual Pension Cost 275,144
Contributions Made-Year Ended April 30,2008 275,144
Change in Net Pension Asset -
Net Pension Asset,Beginning of Year 16,161
Net Pension Asset,End of Year $ 16,161
10. Other Post-Employment Benefits
Plan Description
In addition to the pension benefits described in Note 9, the City provides limited health care insurance
coverage for its eligible retired employees. The benefits, benefit levels, employee contributions and
employer contributions are governed by the City and can be amended by the City under its personnel manual
3 and union contracts. To be eligible, employees must be enrolled in the City's healthcare plan at time of
retirement, and receive a pension from either the IMRF or the police Pension Fund. The City provides an
implicit premium subsidy to certain retirees who meet eligibility conditions, and healthcare access to other
retired members provided the member pays 100%of the blended premium.
All healthcare benefits are provided through the City's health insurance plan. The benefit levels are similar to
those afforded to active employees. Benefits include general in-patient and out-patient medical services,
vision care, dental care and prescriptions. Upon a retired participant reaching the age of 65, Medicare
becomes the primary insurer and the City's plan becomes secondary.
Membership
At April 30,2009,membership consisted of:
Retirees and Beneficiaries Currently Receiving Benefits 1
Active Vested Employees 26
Active Nonvested Employees 70
Total —3Z
61
UNITED CITY OF YORKVILLE,ILLINOIS
Notes to the Financial Statements(Cont.) E
April 30,2009
10. Other Post-Employment Benefits(Cont.) E
Funding Policy
The City negotiates the contribution percentages between the City and employees through union contracts E
and personnel policy. Retired employees contribute 100%of the actuarially determined premium to the plan.
For the fiscal year ended April 30,2009,retirees contributed and the City contributed$1,814.
Annual OPEB Costs and Net OPEB Obligation
The City had an actuarial valuation performed for the plan as of April 30,2009 to determine the funded status E
of the plan as of that date, as well as the employer's annual required contribution (ARC) for the fiscal year
ended April 30,2009. The City's annual OPEB cost(expense)of$4,159 was equal to the ARC for the fiscal
year, as the transition liability was set at zero as of May 1, 2008. The City's annual OPEB cost, the
percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for 2009 was as
follows:
Percentage
Annual of Annual Net
Fiscal OPEB Employer OPEB Cost OPEB
Year End Cost Contributions Contributions Obligation
April 30,2009 $ 4,159 1,814 43.62% 2,345
In future years, three-year trend information will be presented. Fiscal year 2009 was the year of
implementation of GASB Statement No. 45, Accounting and Financial Reporting by Employers for
Postemployment Benefts Other Than Pensions, and the City elected to implement prospectively, therefore,
prior year comparative data is not available.
The Net OPEB Obligation at April 30,2009 was calculated as follows:
Service Cost $ 2,415
Amortization of Unfunded Liability 1,546
Interest Cost 198
Total OPEB Cost 4,159
Contributions Made I.814
Net OPEB Obligation,End of Year 2,345
E
The funded status of the plan as of April 30,2009 was as follows: rR
Actuarial Accrued Liability(AAL) $ 46,747
Actuarial Value of Plan Assets 0
Unfunded Actuarial Accrued Liability(UAAL) 46,747
Funded Ratio (Actuarial Value of Plan Assets/AAL) 0.00%
Covered Payroll(Active Plan Members) 6,299,956
UAAL as a Percentage of Covered Payroll 0.74%
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UNITED CITY OF YORKVILLE,ILLINOIS
Notes to the Financial Statements(Cont.)
April 30,2009
10. Other Post-Employment Benefits(Cont.)
Actuarial Methods and Assumptions
Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
understood by the employer and plan members) and include the types of benefits provided at the time of
valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that
point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects
of short-terns volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the
long-term perspective of the calculations.
In the April 30, 2009 actuarial valuation, the entry age normal cost method was applied. The actuarial
assumptions included an investment rate of return of 5%, initial healthcare inflation rate of 8%, projected
salary increases of 5%,and a level-percentage-of-payroll over a 30-year open amortization period.
11. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omissions; injuries to employees; and natural disasters. These risks are covered by commercial
insurance purchased from independent third parties. The City also purchased its employee health and
accident insurance from commercial carriers. Settled claims from these risks have not exceeded commercial
insurance coverage for the past three years. There were no significant reductions in insurance coverage
during the fiscal year ended April 30,2009.
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