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I <br />L <br />2. Tlie Long Lake Auditor has prepared a funding projection for pension benefit increases <br />bused on the following parameters: <br />A. The projections assume a 5% rate of return on the pension assets <br />B. 'ITic projections provide for 100% funding of the pension liabilities <br />C. The projections reflect the recent higher 2% State Aid due to higher insurance <br />premiums, and due to the addition of the northwest comer of Orono to the Long <br />Lake fire service area. They also reflect higher 2% State Aid in 2007, based on <br />adding the Navarre area to the Long Lake fire service area. <br />D. The Auditor has prepared a funding projection that assumes an annual pension <br />benefit incrca.se of 3%. This level of increase is related to the average annual pay <br />increases provided by the Cities to their various employee groups. These pay <br />increases have averaged about 3% for a number of years. <br />B. The funding projection is ba.sed on increasing the pension benefit from the <br />current level of $2,282 per year of service to $2,375 per year of service in 2003, <br />and provides for 3% benefit increases in the following years. <br />3. Hie funding projection indicates the benefit scenario rcticctcd in points 2D and 2i:i <br />above can Iw accomplished with no eoniribulion needed by the Cities. <br />COUNCIL ACTION KKQULSTED <br />Motion to approve the recommended plan and policy for adjusting the Long Lake Fire Relief <br />As.sociatioii {lension benefit level, which calls for the pension benefit to be increa.sed from <br />$2,282 per year of service to $2,375 per year of .service for 200.3. and to be increased by 3% per <br />year going forward.