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CITY OF ROSEVILLE MINNESOTA NOTES TO FINANCIAL STATEMENTS - (CONTINUED) DECEMBER 31,1989 Note 72 Defined 6en fit Pension Pta - Volunt er Fi e R Lief Association ([ontinuedZ Vested Deferred Must 6e a member of the association for ten (10) years and served twenty (20) years in the RoseviLLe Fire �epartment and separated before the age of fifty (50). DeferraL is untiL after the age or fifty (50) and regular benefit requirements are met. A variety of significant actuarial assumptions are used to determine the standardized measure of the pension benefit o6ligation and these assumptions are summarized 6eLow: * The present vaLue of future pension payments was computed 6y asing a discount rate of five percent. The discount rate is eq�aL to the estimated tong-term rate ot return on current and future investments of the pension plan. * Future pension payments refLect no post-retirement 6enefit increases, which is consistent with the terms ot the pension agreement. Funding Status and Progress - The amount shown 6elov as the "pension benefit ohLigation" is a standardized disclosure measure of the present vaLue of pension benefits, adjusTed for ihe effects of projected saLary increases (if any) and step-rate benefits, estimated to 6e paya6te in the future as a result of service to date. The measure is intended to heLp users assess the funding status of the association on a going-mncern 6asis, assess progress made i� accumulating sufficient assets to pay benefits when due, and make comparisons amon9 employers. The measure is the actuariaL present val�e of credited projected 6enetits and is independent of the funding method used to determine contrihuiions to the association. The unfunded pension 6enefit obligation as of January 1, 1989, was as foltous: Pension benefit obLigation Retirees and heneficiaries currently receiving henefits and terminated employees not yet receiving 6enefits S� 772,239 Current employees 7 851.665 7otal pension benefit obligation S 2,623,904 Net assets avaiLable for 6enefits at Lower o4 mst or market� Z,069.467 U�funded pension benefit o6Ligation S 554.437 No changes in actuariat assumptions or 6enefits provisions that would significantly affect the valuation ot the pension benefit obligation occurred during 1989. 46