Number
091274
Version
SUBSTITUTE 3
Reference
Sponsor
THE CHAIR
Title
A substitute charter ordinance relating to annual valuations of the assets and liabilities of the employes’ retirement system.
Sections
36-02-3.2 cr
36-02-3.5 cr
36-02-3.7 cr
36-02-8.2 cr
36-02-17.5 cr
36-08-6-h-2 am
36-15-15 ra
36-15-15-b cr
Analysis
This charter ordinance provides that, beginning with the valuation of the assets and liabilities of the employes’ retirement system that determines employer contributions due and payable January 31, 2011, the system’s actuary shall employ a 5-year asset smoothing period and an asset valuation corridor that allows for a variation between the market value and actuarial value of assets of 20%. The actuary shall calculate amortization of the unfunded liability based on a level percent of payroll amortization. The actuary shall apply a closed amortization method to a 24-year amortization period until the amortization period is reduced to the expected future working lifetime of the active system’s population, calculated separately for police, fire and general city members.
The charter ordinance also provides that no changes will be made to the amortization and smoothing methods described in the preceding paragraph without an affirmative vote of the annuity and pension board of at least 5 of its members and written certification from the annuity and pension board’s actuary “that any such changes comply with Actuarial Standards of Practice.”
Body
The Mayor and Common Council of the City of Milwaukee do ordain as follows:
Part 1. Section 36-02-3.2, 3.5, 3.7, 8.2 and 17.5 of the city charter is created to read:
36.02 Definitions.
3.2. AMORTIZATION PERIOD shall mean the period of time over which unfunded liability, if any, is amortized.
3.5 ASSET SMOOTHING PERIOD shall mean the length of time over which changes in the market value of assets are converted to actuarial values.
3.7 ASSET VALUATION CORRIDOR shall mean the maximum va...
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