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CITY OF EUGENE, OREGON
<br />Notes to Basic Financial Statements
<br />(5) Other Information, continued
<br />(C) Retirement Plan, continued
<br />Plan Description, continued
<br />In the 2003 legislative session, the Oregon Legislative Assembly created a successor plan for PERS. The
<br />Oregon Public Service Retirement Plan (OPSRP) a cost-sharing multiple-employer defined benefit and defined
<br />contribution pension plan. OPSRP is effective for all employees hired on or after August 29, 2003. The new
<br />plan consists of a defined benefit program (the “Pension Program”) and a defined contribution portion (the
<br />Individual Account Program or “IAP”). The Pension Program portion of OPSRP provides a life pension funded
<br />by employer contributions. Benefits are calculated by a formula for members who attain normal retirement age.
<br />The formula takes into account final average salary, years of service, and a factor that varies based on type of
<br />service (general versus police or fire).
<br />The defined contribution portion of OPSRP is provided to all members who are PERS or OPSRP eligible. State
<br />statute requires that covered employees contribute 6.0% of their annual covered salary to the IAP plan effective
<br />January 1, 2004. Statute allows that the employer may elect to pay any or all of the employees’ required IAP
<br />contributions. Those employees who had established a PERS membership prior to the creation of OPSRP will
<br />retain their existing PERS accounts, but member contributions made after the beginning of 2004 will be
<br />deposited into the member’s IAP account.
<br />Both PERS and OPSRP are administered by the Oregon Public Employees Retirement Board (OPERB). The
<br />comprehensive annual financial report of the funds administered by the OPERB may be obtained by writing to
<br />Oregon Public Employees Retirement System, P.O. Box 23700, Tigard, OR 97281-3700, by calling (503) 598-
<br />http://oregon.gov/PERS/
<br />7377, or by accessing the PERS web site at .
<br />Funding Policy
<br />The City has elected to pay all of the employees’ required IAP contributions. For the fiscal year ended June 30,
<br />2011, the 6.0% IAP contribution was $5,393,764 (5.99% of covered payroll). In addition to the IAP contribution,
<br />the City contributed 10.1% of covered payroll to the defined benefit pension plans. This contribution rate was
<br />determined as part of the December 31, 2007 PERS and OPSRP actuarial valuations. The most recent
<br />actuarial valuation was prepared as of December 31, 2009. The 2009 valuation was used to establish rates as
<br />of July 1, 2011. The City also charges an internal rate of 5.5% of payroll to departments to fund the repayment
<br />of the City’s pension obligation bonds, which were issued in 2002.
<br />Annual Pension Cost
<br />The City of Eugene has submitted contributions as required by OPERB. For the fiscal year ended June 30,
<br />2011, the City’s annual pension expenditures/expense exclusive of the 6.0% IAP contribution was $10,683,385.
<br />This amount consisted of the annual required contribution to the defined benefit pension plans of $9,088,115
<br />and $1,595,270 in amortization of pension assets. The City’s contributions were equal to the annual required
<br />contributions, which were less than the annual pension cost as a result of the amortization of pension assets.
<br />The City’s annual pension cost and pension assets for the year ended June 30, 2011, were as follows:
<br />Annual required contribution$9,088,115
<br />Interest on pension assets(4,779,461)
<br />Adjustment to the annual required contribution6,374,731
<br />Annual pension cost10,683,385
<br />Contributions made9,088,115
<br />Decrease in pension assets(1,595,270)
<br />Pension assets, beginning of year59,743,261
<br />Pension assets, end of year$58,147,991
<br />continued
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