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statewide pension fund for police officers and firefighters. The
State Fund was created to replace unfunded plans of the City and
other municipalities with a fully funded pension plan. The State
Fund assumed and guaranteed the pre-1967 pension liabilities of
Ohio municipalities, including the City (the State Fund
Obligation). In addition, the State law provided that pension
liabilities for police officers and firefighters accruing on and
after January 1, 1967, would be supported by current employer and
employee contributions.
Pursuant to the State law, the value of the transferred
liabilities and assets of each municipality was determined by The
Wyatt Company (Wyatt), an actuarial company employed by the State
to make the calculations. Wyatt computed the present value of
each municipality's accrued unfunded pension liability, using a
discount factor of 4.25 percent, compounded annually (the
mathematical equivalent of 4.21 percent compounded semiannually),
and certain actuarial assumptions based on mortality tables.
Wyatt determined the present value of the accrued unfunded
liabilities of the City Fund that were transferred to the State
Fund, to be $44,638,971. Of that amount, $1,929,702 was
satisfied by assets of the City Fund, and the City was credited
with $21,470 of accrued interest, resulting in a net accrued
liability of $42,687,799.
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Last modified: May 25, 2011