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Cabarrus County, North Carolina
<br />Notes to the Financial Statements
<br />For the Year Ended June 30, 2010
<br />Contributions. The County is required by Article 12D of G.S. Chapter 143 to provide these retirement benefits and
<br />has chosen to fund the amounts necessary to cover the benefits earned by making contributions based on actuarial
<br />valuations. The County transfers the contribution in a subsequent year following notification by the actuary of the
<br />amount. For the current year, the County contributed $353,811 or 4.31 % of annual covered payroll. There were no
<br />contributions made by employees. The County's obligation to contribute to this plan is established and may be
<br />amended by the North Carolina General Assembly. Administration costs of the Separation Allowance are financed
<br />through investment earnings.
<br />The annual required contribution for the current year was determined as part of the December 31, 2008 actuarial
<br />valuation using the projected unit credit actuarial cost method. The actuarial assumptions included (a) 7.25%
<br />investment rate of return (net of administrative expenses) and (b) projected salary increases ranging from 4.5% to
<br />12.3% per year. Both (a) and (b) included an inflation component of 3.75 %. The assumptions did not include
<br />postretirement benefit increases.
<br />The actuarial value of assets was determined using the market value of investments. The unfunded actuarial
<br />accrued liability is being amortized as a level percentage of projected payroll on a closed basis. The remaining
<br />amortization period at December 31, 2008 was 10 years.
<br />Annual Pension Cost and Net Pension
<br />Obligation. The County's annual pension
<br />cost and net pension obligation to the
<br />Separation Allowance for fiscal year
<br />ending June 30, 2010 are shown at right:
<br />Annual required contribution
<br />$ 412,065
<br />Interest on net pension obligation
<br />11,716
<br />Adjustment to annual required contribution
<br />(18,678)
<br />Annual pension cost
<br />405,103
<br />Contributions made
<br />(353,811)
<br />Increase in net pension obligation
<br />51,292
<br />Net pension obligation beginning of year
<br />161,605
<br />Net pension obligation end of year
<br />$ 212,897
<br />Funded Status and Funding Progress. As of December 31, 2009, the most recent actuarial valuation date, the plan
<br />was 3.04 percent funded. The actuarial accrued liability for benefits was $3,494,890, and the actuarial value of
<br />assets was $106,199, resulting in an unfunded actuarial accrued liability (UAAL) of $3,388,691. The covered
<br />payroll (annual payroll of active employees covered by the plan) was $8,217,096 and the ratio of the UAAL to the
<br />covered payroll was 41.24 percent.
<br />The schedule of funding progress, presented as required supplementary information following the notes to the
<br />financial statements, presents multiyear trend information about whether the actuarial value of plan assets are
<br />increasing or decreasing over time relative to the actuarial accrued liability for benefits.
<br />c. Supplemental Retirement Income Plan (401 k)
<br />Plan Description. The County contributes to the Supplemental Retirement Income Plan (Plan), a defined
<br />contribution pension plan administered by the Department of State Treasurer and a Board of Trustees. The Plan
<br />also provides retirement benefits to law enforcement officers employed by the County. Article 5 of G.S. Chapter 135
<br />assigns the authority to establish and amend benefit provision to the North Carolina General Assembly. The
<br />Supplemental Retirement Income Plan for Law Enforcement Officers is included in the Comprehensive Annual
<br />Financial Report (CAFR) for the State of North Carolina. The State's CAM includes the pension trust fund
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<br />3 Year Trend Information
<br />Fiscal Year
<br />Annual Pension
<br />Percentage of
<br />Net Pension
<br />Ended
<br />Cost (APC)
<br />APC Contributed
<br />Obligation
<br />6/30/2008
<br />$342,978
<br />99.29%
<br />$166,281
<br />6/30/2009
<br />345,999
<br />101.35%
<br />161,605
<br />6/30/2010
<br />405,103
<br />87.34%
<br />212,897
<br />Funded Status and Funding Progress. As of December 31, 2009, the most recent actuarial valuation date, the plan
<br />was 3.04 percent funded. The actuarial accrued liability for benefits was $3,494,890, and the actuarial value of
<br />assets was $106,199, resulting in an unfunded actuarial accrued liability (UAAL) of $3,388,691. The covered
<br />payroll (annual payroll of active employees covered by the plan) was $8,217,096 and the ratio of the UAAL to the
<br />covered payroll was 41.24 percent.
<br />The schedule of funding progress, presented as required supplementary information following the notes to the
<br />financial statements, presents multiyear trend information about whether the actuarial value of plan assets are
<br />increasing or decreasing over time relative to the actuarial accrued liability for benefits.
<br />c. Supplemental Retirement Income Plan (401 k)
<br />Plan Description. The County contributes to the Supplemental Retirement Income Plan (Plan), a defined
<br />contribution pension plan administered by the Department of State Treasurer and a Board of Trustees. The Plan
<br />also provides retirement benefits to law enforcement officers employed by the County. Article 5 of G.S. Chapter 135
<br />assigns the authority to establish and amend benefit provision to the North Carolina General Assembly. The
<br />Supplemental Retirement Income Plan for Law Enforcement Officers is included in the Comprehensive Annual
<br />Financial Report (CAFR) for the State of North Carolina. The State's CAM includes the pension trust fund
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