AG 2012 12 17 - Laserfiche WebLink

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Cabarrus County, North Carolina Notes to the Financial Statements For the Year Ended June 30, 2012 All full -time County law enforcement officers are covered by the Separation Allowance. At December 31, 2011, the Separation Allowance's membership consisted of: Summary of Significant Accounting Policies: Retirees receiving benefits Terminated plan members entitled to but not yet receiving benefits Active plan members Total IN 198 216 Basis of Accounting. Financial statements for the Separation Allowance are prepared using the accrual basis of accounting. Employer contributions to the plan are recognized when due and when the County has made a formal commitment to provide the contributions. Benefits are recognized when due and payable in accordance with the terms of the plan. Method used to Value Investments. Investments are reported at fair value. Short -term money market debt instruments, deposits, and repurchase agreements, are reported at cost or amortized cost, which approximates fair value. Certain longer term United States Government and United States Agency securities are valued at the last reported sales price. Contributions. The County is required by Article 12D of G.S. Chapter 143 to provide these retirement benefits and has chosen to fund the amounts necessary to cover the benefits earned by making contributions based on actuarial valuations. The County transfers the contribution in a subsequent year following notification by the actuary of the amount. For the current year, the County contributed $551,536 or 6.28% of annual covered payroll. There were no contributions made by employees. The County's obligation to contribute to this plan is established and may be amended by the North Carolina General Assembly. Administration costs of the Separation Allowance are financed through investment earnings. The annual required contribution for the fiscal year ended June 30, 2012 was determined as part of the December 31, 2010 actuarial valuation using the projected unit credit actuarial cost method. The actuarial assumptions included (a) 5.00% investment rate of return (net of administrative expenses) and (b) projected salary increases ranging from 4.25% to 7.85% per year. Both (a) and (b) included an inflation component of 3.00 %. The assumptions did not include postretirement benefit increases. The actuarial value of assets was determined using the market value of investments. The unfunded actuarial accrued liability is being amortized as a level percentage of pay on an open basis. The remaining amortization period at December 31, 2010 was 10 years. Annual Pension Cost and Net Pension Obligation. The County's annual pension cost and net pension obligation to the Separation Allowance for fiscal year ending June 30, 2012 are shown at right: Annual required contribution Interest on net pension obligation Adjustment to annual required contribution Annual pension cost Contributions made Increase in net pension obligation Net pension obligation beginning of year Net pension obligation end of year $ 451,644 17,028 (37,078) 431,594 (551,536) 119,942 340,558 $ 220,616 73 Attachment number 1 1 -3 Page 329