Comprehensive Annual Financial Report for the ... - WMATA.com

Washington Metropolitan Area Transit AuthorityFY 2009 Comprehensive Annual Financial ReportNotes to Basic Financial StatementsJune 30, 2009 and 2008(8) Pension Plans (Continued)(iv) Union Local 922 Plan (Continued)The normal retirement monthly pension is the sum of 1.0 percent for years of service prior to May1, 1973 plus 1.85 percent for years of service after May 1, 1973 of the highest 4-year averageearnings with a minimum benefit of $175 monthly. The plan provides retired participants annualcost-of-Iiving increases, permits early retirement, and provides for benefits in the event of death,disability and terminated employment. The Authority contributes that amount required to fund thenormal cost of the plan plus an additional amount necessary to amortize the unfunded actuarialaccrued liability as required by the collective bargaining agreement between the Authority and UnionLocal 922. After ten years of service participants, are 100 percent vested.(v)Union Local 2 PlanAll full-time employees covered by the Local 2 bargaining agreement hired prior to January 1, 1999are eligible to participate in the Local 2 Plan. The plan is governed by the Authority's Board ofDirectors with consideration of both the applicable union agreements and Authority personnelpractices. The normal retirement age is 65, and such retirees are entitled to annual retirementbenefits equal to 1.6 percent of final average compensation multiplied by years of credited services,plus 0.9 percent of final average compensation in excess of the Social Security breakpoint multipliedby years of credited service not in excess of 20 years. Unreduced retirement benefits are availableupon reaching age 55 and meeting the "Rule of 83" with years of service and age. The maximumnormal retirement benefit is not to exceed 80 percent of final average compensation. The planprovides retired participants annual cost-of-living increases, permits both early and later retirement,and provides for benefits in the event of death, disability, and terminated vested employment. TheAuthority contributes the total cost of the plan. After five years of service, participants are 100percent vested.(b) Funding Status and Annual Pension Cost(i)Salaried Personnel PlanThe Salaried Personnel Plan's funding policy, as approved by the Board of Directors, provides forperiodic employer contributions at actuarially determined rates that, expressed as percentages ofannual covered payroll, are sufficient to accumulate assets to pay benefits when due. The actuarialcost method is the individual entry age method of funding.As of July 1, 2008, the plan was 74.7% funded. The actuarial accrued liability for benefits was$455.3 million, and the actuarial value of assets was $340.3 million, resulting in an unfundedactuarial accrued liability (UAAL) of $115.0 million. The covered payroll (annual payroll of activeemployees covered by the plan) was $33.5 million, and the ratio of the UAAL to the covered payrollwas 343.4%.The schedule of funding progress, presented as Required Supplementary Information (RSI) followingthe notes to the financial statements, presents multiyear trend information about whether theactuarial value of plan assets are increasing or decreasing over time relative to the actuarial accruedliability for benefits.43