CAnFR 2017 Full Report

Consolidated Financial Statements

10. Employee Future Benefits The City provides employee future benefits in the form of severance benefits and vested and non-vested sick leave to qualifying employees. These benefits are not separately funded. Severance benefits are cash settlements paid to employees who cease their employment with the City after a specified period of time. Employees hired before February 11, 1999 qualify for five days pay per year of employment, provided they either work a minimum of 20 years with the City or retire as defined by the Public Sector Pension Plan Act. Full time employees hired after February 11, 1999 qualify for 20 days pay provided they work a minimum of 10 years with the City and retire as defined by the Public Sector Pension Plan Act. The City permits regular employees to accumulate up to 18 days per year of service for future illnesses up to a maximum of 250 days. For certain qualifying employees a portion of this benefit vests; for the balance, this benefit does not vest and cannot be converted to any other type of benefit. An actuarial valuation of these benefits was performed to determine the City's liability and accrued benefit obligation as at December 31, 2015 and updated for December 31, 2017. The valuation resulted in an unamortized actuarial loss of $364,900 ($398,200 for 2016) at December 31, 2017. Actuarial gains or losses are amortized over the expected average remaining service life of employees. The benefit liability at December 31, 2017 was $4,567,300 , ($4,704,700 for 2016) comprised as follows:

2017

2016

Benefit Liability - Beginning of the year

$ 4,704,700 $ 4,908,000

Add:

Current service costs

343,800 148,300

374,500 150,200

Interest on accrued benefit obligation Amortization of actuarial loss (gain)

Less:

33,300

35,600

Benefits paid during the year

(662,800)

(763,600)

Benefit Liability - End of the year

4,567,300

4,704,700

Add (Less): Unamortized actuarial loss Accrued benefit obligation - End of the year

364,900

398,200

4,932,200

5,102,900

Actuarial assumptions used to determine the City's accrued benefit obligation are as follows:

2017

2016

Discount rate (long-term borrowing rate)

2.90 % 2.00 % 3.04 %

2.90 % 2.00 % 3.04 %

Expected future inflation rate

Merit and inflationary wage and salary increases averaging Estimated average remaining service life of employees (years)

13.0

13.0

City of Maple Ridge - 2017 Annual Report Page 49