Section 105.665

Title VIII PUBLIC OFFICERS AND EMPLOYEES, BONDS AND RECORDS

Chapter 105

Effective - 28 Aug 2007, 2 histories, see footnote   (history) 

  105.665.  Cost statement of proposed changes prepared by actuary — contents. — 1. The legislative body or committee thereof which determines the amount and type of plan benefits to be paid shall, before taking final action on any substantial proposed change in plan benefits, cause to be prepared a statement regarding the cost of such change.

  2. The cost statement shall be prepared by an actuary using the methods used in preparing the most recent periodic actuarial valuation for the plan and shall, without limitation by enumeration, include the following:

  (1) The level normal cost of plan benefits currently in effect, which cost is expressed as a percent of active employee payroll;

  (2) The contribution for unfunded accrued liabilities currently payable by the plan, which cost is expressed as a percent of active employee payroll and shall be over a period not to exceed thirty years;

  (3) The total contribution rate expressed as a percent of active employees payroll, which contribution rate shall be the total of the normal cost percent plus the contribution percent for unfunded accrued liabilities;

  (4) A statement as to whether the legislative body is currently paying the total contribution rate as defined in subdivision (3) of this subsection;

  (5) The total contribution rate expressed as a percent of active employee payroll which would be sufficient to adequately fund the proposed change in benefits;

  (6) A statement as to whether such additional contributions are mandated by the proposed change;

  (7) A statement as to whether or not the proposed change would in any way impair the ability of the plan to meet the obligations thereof in effect at the time the proposal is made;

  (8) All assumptions relied upon to evaluate the present financial condition of the plan and all assumptions relied upon to evaluate the impact of the proposed change upon the financial condition of the plan, which shall be those assumptions used in preparing the most recent periodic actuarial valuation for the plan, unless the nature of the proposed change is such that alternative assumptions are clearly warranted, and shall be made and stated with respect to at least the following:

  (a) Investment return;

  (b) Pay increase;

  (c) Mortality of employees and officials, and other persons who may receive benefits under the plan;

  (d) Withdrawal (turnover);

  (e) Disability;

  (f) Retirement ages;

  (g) Change in active employee group size;

  (9) The actuary shall certify that in the actuary's opinion the assumptions used for the valuation produce results which, in the aggregate, are reasonable;

  (10) A description of the actuarial funding method used in preparing the valuation including a description of the method used and period applied in amortizing unfunded actuarial accrued liabilities;

  (11) The increase in the total contribution amount required to adequately fund the proposed change in benefits, expressed in annual dollars as determined by multiplying the increase in total contribution rate by the active employee annual payroll used for this valuation.

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(L. 1979 H.B. 130 § 2, A.L. 1996 H.B. 1355, A.L. 2007 S.B. 406)