Finance Committee - 4/4/2018 Page 5
Alderman Laws
Thank you for that. | was wondering if there is a relationship between the pension liability on Page 32 and the
unassigned fund balance, if that is going to change over time. | mean is the pension liability going to increase
in the coming years? Is that something we should be concerned about? And does that mean that we have to
counteract how much the pension goes up by increasing the amount that we have in the unassigned fund?
Mr. McIntire
There is not a real relationship between the net pension liability on the page that you referenced and the
unassigned fund balance. It is no surprise that pension costs are being increased in the State and that is
because there is a funding schedule, | believe it goes out to 2039 that’s when this plan is scheduled to be fully
funded. But there really isn’t a link between the net pension liability and unassigned fund balance.
Alderman Gathright
You used the terminology “significant” can you explain to me what would make something significant?
Mr. Mcintire
Great question. In general it would be a material amount and by that it would in our judgement it could affect
how someone interprets these statements. If there was a $10,000.00 reclassification and | don’t believe that
there was, but if we needed to propose an entry that had the City move a $10,000.00 accounts payable from
one fund to another, when you look at this report, that’s probably | would view that as an insignificant entry,
because for the most part it is reclassification. Also, it probably isn’t going to impact how these statements are
viewed by most readers. Does that help?
Alderman Gathright
Yes.
Mayor Donchess
What is the percentage of funding the percent solvent that the State Pension Fund is? It used to be around
60%.
Mr. McIntire
| should know that off the top of my head but if you give me just a second. For those that are curious, I’m
turning to Page 130. It is just slightly more than 58%.
Mayor Donchess
And that is of June 30, 2017?
Mr. McIntire
Another great question. The Net Pension Liability that we are talking about that is presented on your financial
statements as of June 30, 2017 is actually measured as of June 30, 2016. It greatly helps with the timing of
getting actuarial reports and getting audited financial statements on a timely basis. Gratefully, the standards
permit the City and all cities and towns to capture that liability as of a year earlier because the actuary has to
perform test data on it. We have to perform test work on it. So that liability and the percentage | referenced
Mr. Mayor of 58% is actually as of June 30, 2016.
