66 / 144
56
For the year ended December 31, 2016
[tabular amounts in thousands of dollars]
NOTESTOTHE CONSOLIDATED
FINANCIAL STATEMENTS
CITY OF SURREY
11.
EMPLOYEE FUTURE BENEFITS
The City provides certain post-employment and sick leave benefits to its employees. These benefits include accumulated non-vested
sick leave, post-employment service pay and post-retirement top-ups for dental, life insurance and accidental death, dismemberment
insurance, vacation deferral, supplementary vacation and benefit continuation for disabled employees. The liability associated with these
benefits is calculated based on the present value of expected future payments pro-rated for services, and is included in accounts payable
and accrued liabilities.
An actuarial valuation for these benefits was performed to determine the City’s accrued benefit obligation as at December 31, 2016.
The difference between the actuarially determined accrued benefit obligation of $25.4 million and the accrued benefit liability of $26.9
million as at December 31, 2016 is an unamortized actuarial gain of $1.5 million. The actuarial gain is amortized over a period equal to the
employees’ average remaining service lifetime of 11 years.
Accrued benefit obligation:
2016
2015
Balance, beginning of year
$
23,687
$
23,107
Current service cost
1,901
1,803
Interest cost
789
766
Actuarial loss (gain)
304
(480)
Benefits paid
(1,317)
(1,509)
Accrued benefit obligation, end of year
$
25,364
$
23,687
Reconciliation of accrued benefit obligation to accrued benefit liability:
2016
2015
Actuarial benefit obligation, end of year
$
25,364
$
23,687
Unamortized actuarial gain
1,539
1,968
Accrued benefit liability, end of year
$
26,903
$
25,655
Actuarial assumptions used to determine the City’s accrued benefit obligation are as follows:
2016
2015
Discount rate
3.20%
3.20%
Expected future inflation rate
1.80%
2.50%
Expected wage and salary range increases
0.50%
0.50%
Employee average remaining service life (years)
11.0
11.0