SUBJECT/RECOMMENDATION:
Title
Approve recommended change in actuarial valuation funding method from Entry Age Normal to Aggregate effective for the actuarial valuation dated January 1, 2025.
Body
SUMMARY:
The City’s actuary, Pete Strong with Gabriel Roeder Smith, has suggested a change in actuarial funding method that will provide the Trustees additional flexibility in determining the level of annual employer contributions to the plan.
Per State Statute the employer is required to fund at least the “normal cost” of the pension benefit annually as calculated by the actuary. The Aggregate funding method calculates the normal cost differently than the Entry Age Normal funding method and is a preferred funding method for the plan at this time, given that the Plan’s funded ratio is greater than 100%. Should the Plan’s funded ratio fall below 100% at a future date, consideration will be given to returning to the Entry Age Normal funding method.
STRATEGIC PRIORITY:
Professional administration of the pension plan assists in attracting and retaining top-quality personnel via this attractive and competitive compensation benefit.