COG Comprehensive Annual Financial Report

there were none. The City’s obligation to contribute to this plan is established and may be amended by the North Carolina General Assembly. The actuarially determined contribution rate of $3,406,217 for FY 2018 is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City contributed $2,671,394 in FY 2018. This amount represents 6.5% of covered employee payroll, respectively. Administrative costs of the Separation Allowance are financed through investment earnings. The annual required contribution for the current year was determined as part of the December 31, 2016 actuarial valuation using the entry age normal actuarial cost method, amortized over a level dollar closed period. The actuarial assumptions include (a) 4.0% investment rate of return and (b) projected salary increase of 3.50% to 7.35%. Both (a) and (b) included an inflation component of 2.5%. The assumptions did not include post-retirement benefit increases. The actuarial value of assets was determined using the market value of investments. The remaining amortization period at December 31, 2016 was 14 years. Pension Liabilities, Pension Expense, and Deferred Outflows of Resources and Deferred Inflows of Resources Related to Pensions At June 30, 2018, The City reported a total pension liability of $31,784,546. The total pension liability was measured as of December 31, 2017 based on a December 31, 2016 actuarial valuation. The total pension liability was rolled forward to December 31, 2017 utilizing standard actuarial update rollfoward procedures incorporating the actuarial assumptions. For the year ended June 30, 2018, the City recognized pension expense of $1,871,348. At June 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources, based on amounts computed as of the December 31, 2017 measurement date.

Deferred Outflows

Deferred Inflows

of Resources

of Resources

Differences between expected and actual experience Changes of assumptions and other inputs (1) Net difference between projected and actual earnings on pension plan investments (2) City contributions subsequent to the measurement date

$

714,155

$

645,718

225,865

1,443,361 2,157,516

Total

$

$

871,583

(1) Amortized over the average remaining service life of active and inactive plan members at the beginning of the fiscal year, or 5.55 years. (2) Amortized over a fixed five-year period.

$1,443,361 reported as deferred outflows of resources related to pensions resulting from City contributions subsequent to the measurement date will be recognized as a decrease of the net pension liability in the year-ended December 31, 2018. Other amounts reported as deferred inflows and deferred outflows of resources related to pensions will be recognized in pension expense as follows: Year ended June 30: 2019 $ (77,424) 2020 (77,424) 2021 (77,424) 2022 (11,484) 2023 86,328 $ (157,428)

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