City and County of Denver Municipal Airport System ANNUAL ...

City and County of Denver
Municipal Airport System
NOTES TO FINANCIAL STATEMENTS
December 31, 2010 and 2009
Pension Plans’ Funding Policy and Annual Pension Cost
For DERP, the City contributes 8.50% of covered payroll and employees make a pre-tax contribution of 2.50% in
accordance with Section 18-407 of the Revised Municipal Code of the City. The City’s contributions to DERP for the
years ended December 31, 2010, 2009 and 2008 were approximately $38,427,461, $41,006,000, and $41,313,000,
respectively, which equaled the required contributions each year. The Airport’s share of the City’s contributions for
the years ended December 31, 2010, 2009 and 2008 were approximately $5,509,853, $5,782,918 and $5,676,000,
respectively.
Postemployment Healthcare Benefits
The health benefits’ account was established by City Ordinance in 1991 to provide, beginning January 1, 1992,
postemployment healthcare benefits in the form of a premium supplement to retired members, their spouses and
dependents, spouses and dependents of deceased active and retired members, and members of the Plan awaiting
approval of retirement applications. During 2009, the monthly health insurance premium supplement was $12.50 per
year of service for retired participants under the age of 65, and $6.25 per year of service for retirees aged 65 and older.
The health insurance premium supplement can be applied to the payment of medical, dental, and/or vision insurance
premiums. The benefit recipient pays any remaining portion of the premiums.
Before consideration of the premium supplement or premiums paid by the employer, the premiums charged to retirees
are the same as charged to active employees for the same coverage. This results in an implicit rate subsidy, which is
considered another postretirement benefit (OPEB). Because the Plan is a cost-sharing multiple-employer plan, the
actuarially determined obligation for the OPEB is not reflected as a liability in the financial statements of the
participating employers. Expense related to the implicit rate subsidy OPEB represents contractually required
contributions under the cost-sharing multi-employer plan.
(16) Deferred Compensation Plan
The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code
Section 457. The plan, available to all City employees, permits them to defer a portion of their salary until future
years. The deferred compensation is not available to employees until termination, retirement, death, or an
unforeseeable emergency.
All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all
income attributable to those amounts, property, or rights are (until paid or made available to the employees or other
beneficiary) held in trust by the City for the exclusive benefit of the participants and their beneficiaries. It is the
opinion of the City’s legal counsel that the City has no liability for losses under the plan but does have the duty of due
care that would be required of an ordinary prudent investor.
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