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CITY OF ROSEVILLE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2013 NOTE 5 - OTHER INFORMATION (Continued) C. Employee retirement systems and pension plans (Continued) 3. Single employer defined benefit pension plan — volunteer fire relief association (Continued) b. Fundin�polic�(Continued) The Minnesota State Aid contribution to the Roseville Firefighter's relief association is recorded as a revenue and expenditure in the General fund of the City. The City's contribution to the Roseville Firefighter's relief association is also recorded as expenditure in the General fund of the City. The Roseville Firefighter's relief association is comprised of volunteers who are considered non-benefit earning employees of the City of Roseville. Therefore, the City has no on-behalf payments of fringe benefits and salaries. D. Annual pension cost and net pension obligation The annual pension cost and net pension obligation for the current year were as follows: Annual required contribution $ 173,096 Interest on net pension obligation (10,158) Adjustment to annual required contribution 31,434 Annual pension cost 194,372 Contributions made (298,232) Increase (decrease) in net pension obligation (103,860) Negative net pension obligation beginning of year (203,163) Negative net pension obligation end of year $(307,023) The annual required contribution was determined as part of the January 1, 2013 actuarial valuation. The actuarial assumptions included (a) 5% investment rate of return (net of administrative expenses); (b) a mortality table of the 1983 Group Annuity Mortality Table for Males and Females; (c) termination of 6 percent rate from age 20-30, grading to no terminations after age 50. In addition, 20% of employees are assumed to terminate during each of the first three years of their employment; (d) disability rates based upon 75 percent of the Railroad Retirement Board Disability Rates; (e) entry age actuarial cost method based upon age on employment date; (g) retirement age based upon the later of age 55 or 20 years of service; (g) 85 percent of inembers are assumed to be married, with wives three years younger than husbands; (h) normal form of payment based upon joint and 100 percent to survivor annuity; (i) asset basis based upon market value; and (j) level dollar amortization which is sufficient to amortize the unfunded actuarial accrued liabiliry by a closed period ending December 31, 2012 and a closed period of 11 years for Plan amendments. Inflation rates are not applicable in the valuation of the �ire relief net pension obligation. 70