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<br /> <br />Both reports showed that the actuarial value of assets were not greater than <br />the market value of assets. Mr. Siepman noted that as long as the increases <br />do not exceed the 6.5% rate of return on the market value of assets the funds <br />would be okay. <br /> <br />Mr. Siepman stated the Board recommended using a funding policy. a 30-year amortization <br />of the unfunded accrued liability (or surplus) plus the normal cost: <br /> <br />The Police and Firefighter’s Plan would have a normal annual cost plus 30- <br />year Amortization of Unfunded Accrued Liability of $1,008,594 on January 1, <br />2012, and an annual cost plus a 30-year Amortization of Unfunded Accrued <br />Liability of $1,074.153 on December 31, 2012. <br /> <br />The Non-uniformed Employees Plan would have a normal annual cost plus a <br />30-year Amortization of Unfunded Accrued Liability of $645,975 on January 1, <br />2012, and an annual cost plus a 30-year Amortization of Unfunded Accrued <br />Liability of $687,963 on December 31, 2012. <br /> <br />Mr. Siepman reviewed Schedule B (attached to end of minutes) which provided a summary <br />of the valuation results in both plans. <br /> <br />Mr. Siepman was asked if the two plans were solvent and he noted that they were. He said <br />they were healthy but they did have some issues, as do many of the existing pension plans. <br />Mr. Kraft asked about the 6.5% rate of return, as he would like to invest in something at 6.5% <br />rate of return. Mr. Siepman explained this rate took into consideration the combination of the <br />next ten years in deriving that number. <br /> <br />Mr. Crow asked to be provided the previous years’ annual rate of return that was used. <br /> <br />Other questions: <br />What percentage of the real estate tax does the City receive for the Police and Firefighters <br />retirement fund and can the City increase this rate or is it at its limit. Ms. Tina Charumilind <br />said she would find out and provide that information to Council. <br /> <br />If the City switched to a Defined Contribution Retirement Plan from the existing Defined <br />Benefit Retirement Plan for all new employees, would the City need to be fully funded in <br />order to switch. Mr. Siepman said it did not have to be fully funded at the time of any <br />change. <br /> <br />What does the City need to do? Mr. Siepman noted the report does not show or tell the City <br />what they should do but rather where the City stands in its obligation to the existing funds. <br /> <br />Mr. Crow noted that Council needed to have continuing discussion on this. <br /> <br />Study session was adjourned at 6:25 p.m. <br /> <br /> <br /> <br />Joyce Pumm, MRCC, MCC <br />City Clerk <br />2 <br /> <br /> <br />