According to the valuation report, the accrued liability is defined as the present value of the accrued benefits. It added that it represents the value of benefits that are in pay status as well as benefits earned as of the valuation date by those who are still working and are expected to earn future benefits and benefits earned by terminated employers who are entitled to future benefits.
The valuation report also showed that there is an unfunded accrued liability of $64,253,066.
The Pension Plan has been suffering from declining contributions for the past years.
The ratio is approximately $48 in benefit payment for every $1 lost in contribution revenue due to retirement.
As contributing members retire, their contributions cease and they become pensioners. This causes contributions to decrease and benefit distributions to increase.
The report also stated that the contribution level recommended is at $8,798,000 or 26.8 percent per payroll.
With this level, the amount needed will be able to cover for normal cost pegged at $2.3 million, amortization of unfunded accrued liability of $5.5 million per annum and allowance for administrative expenses of $300,000.
The report also stated that although there remains an unfunded accrued liability , the administration is able to pay current benefits well into the future.
However it added that the current contributions levels are below the actuarial recommended contribution and without increases to the contributions or decreases to future benefits, the plan is not “actuarially sound.”
