Agenda Packet 12-9-19 Meeting - Laserfiche WebLink

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CITY OF EUGENE, OREGON Notes to Basic Financial Statements continued (5) Other Information, continued (C) Retirement Plan – Oregon PERS (OPERS), continued Benefit Changes After Retirement Under ORS 238A.210, monthly benefits are adjusted annually through cost-of-living (COLA) changes. All monthly pension and annuity benefits are eligible for postretirement adjustments. As a result of the Senate Bills 822 and 861 and the Oregon Supreme Court decision in Moro v. State of Oregon, automatic post-retirement adjustments are based on a blended COLA rate based on when the benefits were earned. Automatic COLA for benefits earned prior to SB 822 and SB 861 Benefits are adjusted annually to reflect the increase or decrease in the Consumer Price Index (Portland area - all items) as published by the Bureau of Labor Statistics. The maximum adjustment to be made for any year is 2 percent of the previous year’s benefit, except for 2013 when the adjustment is limited to 1.5%. Any CPI change in excess of the limit is accumulated for future benefit adjustments that would otherwise be less than the limit. No benefit will be decreased below its original amount. Automatic adjustments for benefits earned post 2013 In 2014 and future years benefits will be increased annually based on a marginal rate schedule. The increase is calculated as 1.25% on the first $60,000 of annual benefit and 0.15% on amounts above $60,000 of annual benefit. Contributions PERS funding policy provides for monthly employer contributions at actuarially determined rates. These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. This funding policy applies to the PERS Defined Benefit Plan and the Other Post-Employment Benefit Plans. Employer contribution rates during the period were based on the December 31, 2016 actuarial valuation which became effective July 1, 2017. The rates in effect for the fiscal year ended June 30, 2019 were 21.40% for Tier One/Tier Two covered members, 12.38% for OPSRP Pension Program General Service Members, and 17.15% for OPSRP Pension Program Police and Fire Members. The City also charged an internal rate of 6.00% of payroll to departments to fund the repayment of the City’s pension obligation bonds, which were issued in 2002. Employer contributions for the year ended June 30, 2019 were $18,597,007. Pension Assets, Liabilities, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions At June 30, 2019, the City reported ($199,826,692) for its proportionate share of the net pension asset (liability). The net pension asset (liability) was measured as of June 30, 2018, and the total pension asset used to calculate the net pension asset (liability) was determined by an actuarial valuation as of December 31, 2016 rolled forward to June 30, 2018. The City's proportion of the net pension asset (liability) was based on a projection of the City's long-term share of contributions to the pension plan relative to the projected contributions of all participating entities, actuarially determined. At June 30, 2018, the City's proportion was 1.3191%, which was a decrease from its proportion measured as of June 30, 2017. For the year ended June 30, 2019, the City recognized pension expense (income) of $38,117,383. At June 30, 2019, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources: 67 December 9, 2019, Meeting - Item 2CCC Agenda - Page 111