June 15, 2009 - District of Mission

Municipal Forest — 50th Year Anniversary
Notes to the Consolidated Financial Statements
for the year ended December 31, 2008
Financial Statements
129
10. Commitments and Contingencies
(a) Pension
The District and its employees contribute to the Municipal Pension Plan (the Plan), a jointly
trusteed pension plan. The Board of Trustees, representing the Plan members and
employers, is responsible for overseeing the management of the Plan, including investment
of the assets and administration of benefits. The Plan is a multi-employer contributory
pension plan. Basic pension benefits provided are defined. The Plan has about 150,000
active members and approximately 54,000 retired members. Active members include
approximately 32,000 contributors from local governments.
Every three years an actuarial valuation is performed to assess the financial position of the
Plan and the adequacy of Plan funding. The most recent valuation as at December 31,
2006, indicated a surplus of $438 million for basic pension benefits. The next valuation will
be as at December 31, 2009, with results available in 2010. The actuary does not attribute
portions of the surplus to individual employers. The District paid $821,119 for employer
contributions to the Plan in fiscal 2008, ($766,037 in fiscal 2007). Employees contributed
$747,885 to the Plan in fiscal 2008 ($686,898 in fiscal 2007).
Due to severe market declines, the 2008 investment return on Plan assets to September
30, 2008 was -6.86%, which is below the actuarial target and slightly below the benchmark.
The Plan could be at an underfunded position in comparison to the 2006 actuary reported
surplus position. If there is an underfunded liability, the employer's contribution rate may
increase. However, this increase may not be sufficient to keep the Plan fully funded.
The Plan's Board of Trustees has reviewed its asset allocation and will be making changes
to its Statement of Investment Policies and Procedures at its March 2009 Board meeting.
(b) Legal Actions
The District has been named as a defendant in various legal actions. No reserve or liability
has been recorded regarding any of these legal actions or possible claims because the
amount of loss, if any, is indeterminable. Settlement, if any, made with respect to these
actions would be accounted for as a charge to expenditures in the period in which
outcomes are known.
(c) Silverdale Creek Estuary Wetlands Property Purchase
In 2005, the District acquired a 25% interest in the Silverdale Creek Estuary Wetlands
property. The District also entered into a co-purchase agreement with Ducks Unlimited
Canada to acquire a further 25% interest in the property, for the amount of $300,000,
divided equally over 4 years. To date, the District has purchased a $75,000 fractional
interest in the property in each of 2006, 2007, and 2008, and is committed to purchase
additional fractional interest in the amount of $75,000 in 2009, as outlined in the Silverdale
Creek Estuary Wetlands Purchase Agreement dated September 30, 2004.
2008 Annual Report - District of Mission
38