2012 Comprehensive Annual Financial Report - the City of Tukwila
2012 Comprehensive Annual Financial Report - the City of Tukwila 2012 Comprehensive Annual Financial Report - the City of Tukwila
CITY OF TUKWILA: 2012 CAFRNOTES TO THE FINANCIAL STATEMENTSBasis of AccountingThe financial statements are prepared using the accrual basis of accounting. Benefits are recognizedwhen due and payable in accordance with the plan.ANNUAL PENSION COST AND NET PENSION OBLIGATION2010 2011 20121 Annual normal cost (BOY) $ - $ - $ -2 Amortization of UAAL (BOY) 11,185 11,523 11,5233 Interest to EOY (1 + 2 x i*) 391 461 4614 ARC at EOY (1 + 2 + 3) 11,576 11,984 11,9845 Interest on NPO (9,057) (11,400) (12,393)6 Adjustment to ARC (18,236) (21,647) (24,488)7 Annual Pension cost (4 + 5 - 6) 20,755 22,231 24,0798 Employer contributions** 46,989 47,065 50,5999 Change in NPO (7- 8) (26,234) (24,834) (26,520)10 NPO at BOY (11 prior yr) (258,764) (284,998) (309,832)11 NPO at EOY (9 + 10) $ (284,998) $ (309,832) $ (336,352)* (i) is the assumed interest rate that year: 3.5% in 2010, 4.0% in 2011, and 4.00% in 2012.** Employer contributions for pensions are total contributions to the Fund net of disbursements from the Fund for medicalexpenses under RCW 41.26.150 and administrative expenses.The Annual Required Contribution (ARC) was computed using the Entry Age Normal Cost Method.Under this method, the projected benefits are allocated on a level basis as a percentage of salary overthe earnings of each individual between entry age and exit age. The amount allocated to each year iscalled the Normal Cost and the portion of the Actuarial Present Value of all benefits not provided for byfuture Normal Cost payments is called the Actuarial Accrued Liability. Since all members have alreadyretired, the amount of the Normal Cost is zero. The Unfunded Actuarial Accrued Liability (UAAL) is theActuarial Accrued Liability minus the actuarial value of the Fund’s assets.FiscalYearEndedAnnualRequiredContributionInterest onNetPensionObligationANNUAL DEVELOPMENT OF PENSION COSTAnnualPensionCostTotalEmployerContributionsChange inNetPensionObligationNet PensionObligationBalance‐‐‐ Amortization‐‐‐ARCAdjustment(Gain)/Loss Factor(Gain)/LossEndingBalance2010 11,576 (9,057) (18,236) 20,755 46,989 (26,234) (284,998) (35,413) 14.1897 (18,236) (284,998)2011 11,984 (11,400) (21,647) 22,231 47,065 (24,834) (309,832) (35,081) 13.1657 (21,647) (309,832)2012 11,984 (12,393) (24,488) 24,079 50,599 (26,520) (336,352) (38,615) 12.6523 (24,488) (336,352)90
CITY OF TUKWILA: 2012 CAFRNOTES TO THE FINANCIAL STATEMENTSPERCENTAGE OF ANNUAL PENSION COST CONTRIBUTEDFiscal Year EndingAnnualPension Cost(APC)Contribution as a*Percentage ofAPCNet PensionObligation(Asset)December 21, 2010 20,755 226 (284,998)December 21, 2011 22,231 212 (309,832)December 21, 2012 24,079 210 (336,352)* In years with a negative APC, this percentage is not applicable.The information presented in the preceding required schedules were determined as part of the actuarialvaluations at the dates indicated.The key actuarial assumptions used for the January 1, 2011 valuation were:Actuarial ValuationsActuarial valuation dateJanuary 1, 2012Actuarial cost methodEntry Age NormalAmortization Method 30-year, closed as of January 1, 1999Remaining amortization period18 yearsAsset valuation methodFair market valueAssumptionsInvestment rate of returnProjected salary increases3.75%3.50%Price inflation 2.50%Cost-of-living adjustmentsBased upon salary increase assumptionwhen appropriate, for FPF benefits.*Based upon inflation assumption for someFPF benefits and all LEOFF benefits.* Under the Firemen's Pension Trust Fund, most adjustments are based on the change insalary for the rank of members held at retirement or based on the Consumer Price Index.Adjustments are determined in accordance with RCW 41.18.150, RCW 41.20 and RCW41.26The Schedule of Funding progress, presented as required supplementary information following the notesof the financial statements, presents multiyear trend information about whether the actuarial value of planassets is increasing or decreasing over time relative to the actuarial accrued liability for benefits. TheSchedule of Employer Contributions is also included as required supplementary information following thenotes to the financial statements.91
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CITY OF TUKWILA: <strong>2012</strong> CAFRNOTES TO THE FINANCIAL STATEMENTSBasis <strong>of</strong> AccountingThe financial statements are prepared using <strong>the</strong> accrual basis <strong>of</strong> accounting. Benefits are recognizedwhen due and payable in accordance with <strong>the</strong> plan.ANNUAL PENSION COST AND NET PENSION OBLIGATION2010 2011 <strong>2012</strong>1 <strong>Annual</strong> normal cost (BOY) $ - $ - $ -2 Amortization <strong>of</strong> UAAL (BOY) 11,185 11,523 11,5233 Interest to EOY (1 + 2 x i*) 391 461 4614 ARC at EOY (1 + 2 + 3) 11,576 11,984 11,9845 Interest on NPO (9,057) (11,400) (12,393)6 Adjustment to ARC (18,236) (21,647) (24,488)7 <strong>Annual</strong> Pension cost (4 + 5 - 6) 20,755 22,231 24,0798 Employer contributions** 46,989 47,065 50,5999 Change in NPO (7- 8) (26,234) (24,834) (26,520)10 NPO at BOY (11 prior yr) (258,764) (284,998) (309,832)11 NPO at EOY (9 + 10) $ (284,998) $ (309,832) $ (336,352)* (i) is <strong>the</strong> assumed interest rate that year: 3.5% in 2010, 4.0% in 2011, and 4.00% in <strong>2012</strong>.** Employer contributions for pensions are total contributions to <strong>the</strong> Fund net <strong>of</strong> disbursements from <strong>the</strong> Fund for medicalexpenses under RCW 41.26.150 and administrative expenses.The <strong>Annual</strong> Required Contribution (ARC) was computed using <strong>the</strong> Entry Age Normal Cost Method.Under this method, <strong>the</strong> projected benefits are allocated on a level basis as a percentage <strong>of</strong> salary over<strong>the</strong> earnings <strong>of</strong> each individual between entry age and exit age. The amount allocated to each year iscalled <strong>the</strong> Normal Cost and <strong>the</strong> portion <strong>of</strong> <strong>the</strong> Actuarial Present Value <strong>of</strong> all benefits not provided for byfuture Normal Cost payments is called <strong>the</strong> Actuarial Accrued Liability. Since all members have alreadyretired, <strong>the</strong> amount <strong>of</strong> <strong>the</strong> Normal Cost is zero. The Unfunded Actuarial Accrued Liability (UAAL) is <strong>the</strong>Actuarial Accrued Liability minus <strong>the</strong> actuarial value <strong>of</strong> <strong>the</strong> Fund’s assets.FiscalYearEnded<strong>Annual</strong>RequiredContributionInterest onNetPensionObligationANNUAL DEVELOPMENT OF PENSION COST<strong>Annual</strong>PensionCostTotalEmployerContributionsChange inNetPensionObligationNet PensionObligationBalance‐‐‐ Amortization‐‐‐ARCAdjustment(Gain)/Loss Factor(Gain)/LossEndingBalance2010 11,576 (9,057) (18,236) 20,755 46,989 (26,234) (284,998) (35,413) 14.1897 (18,236) (284,998)2011 11,984 (11,400) (21,647) 22,231 47,065 (24,834) (309,832) (35,081) 13.1657 (21,647) (309,832)<strong>2012</strong> 11,984 (12,393) (24,488) 24,079 50,599 (26,520) (336,352) (38,615) 12.6523 (24,488) (336,352)90
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