Item 3C: Adoption of Resolution Acknowleding CAFR

Home Browse Search

CITY OF EUGENE, OREGON Notes to Basic Financial Statements (5) Other Information, continued (C) Retirement Plan, continued Plan Description, continued In the 2003 legislative session, the Oregon Legislative Assembly created a successor plan for PERS. The Oregon Public Service Retirement Plan (OPSRP) a cost-sharing multiple-employer defined benefit and defined contribution pension plan. OPSRP is effective for all employees hired on or after August 29, 2003. The new plan consists of a defined benefit program (the “Pension Program”) and a defined contribution portion (the Individual Account Program or “IAP”). The Pension Program portion of OPSRP provides a life pension funded by employer contributions. Benefits are calculated by a formula for members who attain normal retirement age. The formula takes into account final average salary, years of service, and a factor that varies based on type of service (general versus police or fire). The defined contribution portion of OPSRP is provided to all members who are PERS or OPSRP eligible. State statute requires that covered employees contribute 6.0% of their annual covered salary to the IAP plan effective January 1, 2004. Statute allows that the employer may elect to pay any or all of the employees’ required IAP contributions. Those employees who had established a PERS membership prior to the creation of OPSRP will retain their existing PERS accounts, but member contributions made after the beginning of 2004 will be deposited into the member’s IAP account. Both PERS and OPSRP are administered by the Oregon Public Employees Retirement Board (OPERB). The comprehensive annual financial report of the funds administered by the OPERB may be obtained by writing to Oregon Public Employees Retirement System, P.O. Box 23700, Tigard, OR 97281-3700, by calling (503) 598- http://oregon.gov/PERS/ . 7377, or by accessing the PERS web site at Funding Policy The City has elected to pay all of the employees’ required IAP contributions. For the fiscal year ended June 30, 2009, the 6.0% IAP contribution was $5,342,477 (6.00% of covered payroll). In addition to the IAP contribution, the City contributed 13.49% of covered payroll to the defined benefit pension plans. This contribution rate was determined as part of the December 31, 2007 PERS and OPSRP actuarial valuations. The City also charges an internal rate of 5.5% of payroll to departments to fund the repayment of the City’s pension obligation bonds, which were issued in 2002. Annual Pension Cost All participating employers are required by law to submit the contributions as adopted by OPERB. For the fiscal year ended June 30, 2009, the City’s annual pension expenditures/expense exclusive of the 6.0% IAP contribution was $13,381,346. This amount consisted of the annual required contribution to the defined benefit pension plans of $12,013,659 and $1,367,687 in amortization of pension assets. The City’s contributions were equal to the annual required contributions, which were less than the annual pension cost as a result of the amortization of pension assets. The City’s annual pension cost and pension assets for the year ended June 30, 2009, were as follows: continued