Question
The municipality of Betaville disclosed the following information about its pension plan. Assume (1) that an 80 percent funded ratio was considered the rule of
The municipality of Betaville disclosed the following information about its pension plan.
Assume (1) that an 80 percent funded ratio was considered the rule of thumb for adequate funding, (2) that holding 15 times net assets to benefits paid was the standard for benefits coverage, and (3) that the ratio of investments to benefits should always be over 1.0
2019 employees' retirement system | 2018 employees' retirement system | |
Total pension liability | ||
Service cost | $3,001,134 | $2,989,546 |
Interest | 10,723,878 | 10,898,001 |
Change in assumptions | - | 5,350,510 |
Benefit payments and refunds | (10,740,272) | (9,240,901) |
Net change in total pension liability | $2,984,740 | $9,998,156 |
Total pension liability - beginning | 150,405,544 | 140,407,388 |
Total pension liability - ending | $153,390,284 | $150,405,544 |
Fiduciary net position: | ||
Contributions: employer | $4,401,710 | $4,330,650 |
Net investment income (loss) | 15,194,567 | 2,412,908 |
Benefit payments and refunds | (10,740,272) | (9,240,901) |
Administrative expenses | (101,456) | (98,923) |
Net change in fiduciary net position | $8,754,549 | $(2,596,266) |
Fiduciary net position - beginning | 136,363,265 | 138,959,531 |
Fiduciary net position - ending | $145,117,814 | $136,363,265 |
Calculate the funded ratio for 2018 (round to the nearest 100th of a percent (e.g. 0.01).
(Referring to the situation in the previous question) Calculate the funded ratio for 2019 (round to the nearest 100th of a percent).
(Referring to the situation in the previous question) Calculate the benefits coverage ratio for 2018 (round to the nearest 100th).
(Referring to the situation in the previous question) Calculate the benefits coverage ratio for 2019 (round to the nearest 100th).
(Referring to the situation in the previous question) Calculate the ratio of investment earnings to benefits for 2018 (round to the nearest 100th).
(Referring to the situation in the previous question) Calculate the ratio of investment earnings to benefits for 2019 (round to the nearest 100th).
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started