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financial statements, presents multiyear trend information about whether the actuarial value of plan assets are increasing
or decreasing over time relative to the actuarial accrued liability for benefits.
e. Actuarial Methods and Assumptions
The annual required contribution (ARC) for the fiscal year ended June 30, 2017 is calculated as of December 31, 2015.
In the December 31, 2015 actuarial valuation used to calculate the FY2017 contribution, the entry age normal actuarial
cost method was used. The actuarial assumptions included a 3.57% investment rate of return, projected salary increases
at 3.5% to 7.35% and a 3.0% inflation component. The actuarial value of assets was determined using a market
valuation. The UAAL is being amortized on a level dollar, closed basis. The remaining amortization period at
December 31, 2015 was 15 years.
3. Supplemental Retirement Income Plan For Law Enforcement Officers
All law enforcement officers employed by the City participate in the State of North Carolina Supplemental Retirement
Income Plan, a 401(k) defined contribution pension plan, administered by the Department of State Treasurer and a Board
of Trustees. Participation begins on the first day of the quarter upon reaching sworn status. In a defined contribution
plan, benefits depend solely on amounts contributed to the plan plus investment earnings. Article 5 of G. S. Chapter 135
assigns the authority to establish and amend benefit provisions to the North Carolina General Assembly. Article 12E of
G. S. Chapter 143 requires that the City contribute each month an amount equal to 5% of each officer’s salary, and all
amounts contributed are vested immediately. Also, the law enforcement officers may make voluntary contributions to
the plan. The City’s contributions for the year ended June 30, 2016 were calculated using a covered payroll (base salary)
in the amount of $35,522,326. The City’s total payroll was $157,237,942. Total contributions were $4,455,827, which
consisted of $1,776,116 from the City and $2,679,711 from the law enforcement officers. The City’s required
contributions and the officer’s voluntary contributions represented 5.0% and 7.5% of the covered payroll amount,
respectively. The Supplemental Retirement Income Plan for Law Enforcement Officers is included in the
Comprehensive Annual Financial Report (CAFR) for the State of North Carolina. The State’s CAFR includes the
pension trust fund financial statements for the Internal Revenue Code Section 401(k) plan that includes the Supplemental
Retirement Income Plan for Law Enforcement Officers. That report may be obtained by writing to the Office of the
State Controller, 1410 Mail Service Center, Raleigh, North Carolina 27699-1410, or by calling (919) 981-5454.