FY 2013 Operating and Capital Budget - Metro Transit

Self-insurance Liability
Years
Airport runways and related facilities 15-25
Buildings and improvements 15-25
Gateway Arch tram facilities 15-25
Riverboats and barges 15-20
Light rail structures and improvements 12-30
Autos and trucks 5-10
Buses, vans, light rail and other revenue vehicles 3-25
Furniture, fixtures, computers and other equipment 3-10
Liabilities for workers' compensation, employee medical and dental insurance claims, and public
liability and property damage claims are recognized as incurred on the basis of the estimated cost
to Metro upon resolution.
Workers’ compensation benefits are awarded on the basis appropriate for the governmental
authority in each state in which Metro operates. Estimated liabilities for injury and damage
claims and medical and dental insurance claims are charged to operations in the year the claim
events occur; estimated liabilities for outstanding claims are made by management.
Self-insured liabilities are reported when it is probable that a loss has occurred and the amount of
the loss can be reasonably estimated. Liabilities include an amount for claims that have been
incurred but not reported.
Since self insured claims depend on such complex factors as inflation, changes in legal doctrines,
and damage awards, the process used in computing claims liability does not necessarily result in
an exact amount. Claims liabilities are evaluated on a case-by-case basis and are re-evaluated
periodically to take into consideration historical experience of recently settled claims, the
frequency of claims, and other economic and social factors. On an annual basis, our external
auditors review claim liabilities as well as our actuaries.
Pension Plans
Metro sponsors four defined-benefit pension plans. It is the policy of Metro’s Board of
Commissioners to see that each pension plan is funded to the fullest extent feasible through a
combination of investments and contributions. Each plan is administered by an Administrative
Pension Committee comprised of Trustees who are selected, at least in part, by the Board. Under
Sections 70.050 A and B of its Collected Board Policies, the Board maintains authority over the
appointment of the Trustees on the Salaried Employees Administrative Pension Committee, and
over one-half of the Trustees on the three Pension Committees that administer the plans for the
employees who are represented by the Amalgamated Transit Union (“ATU”) and the
International Brotherhood of Electrical Workers (“IBEW”). The ATU and the IBEW select the
other one-half of the Trustees on those three Committees. The Administrative Pension
Committees are authorized to administer their respective plan’s assets, determine eligibility for
33