CAFR - sdcera

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F I N A N C I A L / N O T E S T O T H E B A S I C F I N A N C I A L S T A T E M E N T S MEMBERSHIP SUMMARY General Safety Total Active Members Tier I 69 - 69 Tier A 14,392 - 14,392 Safety - 3,272 3,272 Total Active Members 14,461 3,272 17,733 Deferred (Terminated) Members Tier I 2,437 - 2,437 Tier A 1,979 - 1,929 Safety - 542 542 Total Deferred (Terminated) Members 4,366 542 4,908 Retired Members Tier I 5,740 - 5,740 Tier II 1,867 - 1,867 Tier A 3,217 - 3,217 Safety - 1,680 1,680 Total Retired Members 10,824 1,680 12,504 Total Members 29,651 5,494 35,145 DEATH AND DISABILITY BENEFITS Non-Service Connected Disability Eligibility: Five years of service credit; no age requirement. Benefit formula per year of service: In general, 1.8% of average compensation for Tier A, Tier I and Safety members per year of service Service Connected Disability Eligibility: No age or service credit requirements Benefit: 50% of final average compensation or a service retirement benefit, whichever is greater Non-Service Connected Death Before Vesting Benefit: Refund of employee contributions with interest plus one month’s salary for each year of credited service to a maximum of six months’ salary Non-Service Connected Death After Vesting Benefit: Generally, 60% of earned benefit payable to surviving eligible spouse or unmarried minor children Service Connected Death Benefit: 50% of final average compensation payable to surviving eligible spouse or unmarried minor children Death After Retirement - Service Retirement or Non-Service Connected Disability Benefit: Percentage of member’s retirement benefit based on option selected at retirement Service Connected Disability Survivorship Benefits Benefit: 100% of member’s retirement benefit continued to surviving eligible spouse or unmarried minor children 24 COMPREHENSIVE ANNUAL FINANCIAL REPORT 2007
N O T E S T O T H E B A S I C F I N A N C I A L S T A T E M E N T S / F I N A N C I A L RETIREE HEALTH BENEFITS Retiree health benefits may be available to eligible retirees to the extent that the Board of Retirement annually approves the payment of such benefits. The County’s Board of Supervisors and the SDCERA Board of Retirement adopted a funding mechanism under section 401(h) of the Internal Revenue Code, which calls for a portion of the County’s contributions to be recorded in a separate account each year. To ensure that the County’s annual contribution for the funding of pension benefits is made whole and complete, the reserve for County contributions is reimbursed from accumulated investment earnings that exceed the assumed rate of return of the investment portfolio. Currently, a health allowance is paid to retirees, under 65 years of age, with at least ten years of credited service in SDCERA, and the amount varies according to total service credit. Those who are 65 or older, with at least ten years of credited service in SDCERA, receive a health allowance, and those who are eligible for Medicare, receive reimbursement for Part B of Medicare. The Health Benefit Reserve is used exclusively to fund future retiree health benefit allowances. The assets in this reserve are commingled with total fund assets for investment purposes. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES MEASUREMENT FOCUS AND BASIS OF ACCOUNTING SDCERA’s operations are accounted for on an economic resources measurement focus and the accrual basis of accounting. Employer and member contributions are recognized when due pursuant to formal commitments, as well as statutory or contractual requirements. Investment income is recognized as revenue when earned. Retirement benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. Other expenses are recognized when the corresponding liabilities are incurred. The net appreciation/(depreciation) in fair value of investments held by SDCERA is recorded as an increase/(decrease) to investment income based on the valuation of investments. USE OF ESTIMATES A number of estimates and assumptions have been made relating to the reporting of assets and liabilities, the disclosure of reserves and designation of plan assets to prepare these financial statements in conformity with accounting principles generally accepted in the United States of America. Actual results could differ from those estimates. CASH AND SHORT-TERM INVESTMENTS Cash and short-term investments consist of cash and securities with fiscal agents and deposits held in a pooled account with the County of San Diego. All participants in the pool proportionately share earnings and losses. Short-term investments consist of cash held in money market accounts and securities readily convertible to cash. CASH EQUIVALENTS Cash equivalents and securities for swaps and futures consist of money market securities and collective short-term investments with original maturities of three months or less. INVESTMENTS The County Employees Retirement Law of 1937 (Law) grants exclusive control to the Board of Retirement over the investment of SDCERA’s investment portfolio. The Law allows for the Board to invest, or delegate the authority to invest, the investment portfolio through the purchase, holding, or sale of any form or type of investment, financial instrument or financial transaction when prudent in the informed opinion of the Board. COMPREHENSIVE ANNUAL FINANCIAL REPORT 2007 25
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CAFR - sdcera

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