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NOTES TO FINANCIAL S7ATEMENTS - (CONTINUED) DECEMBER 31,1990 Note 17 - Sinqle Emptoyer Defined Benefit Pension Ptan - Volunteer Fire Retief Association (Continued) Permanent Disabitity - a mem6er uho is permanentty disabled in the line of duty shalt receive the maximum pension set out in the monthly benetit and lump sum section above. The computation uill assume 20 years service untess the member�s years of service are greaten Actual years of service or 20 years, uhichever provides the highest benefit, uitt be used for com�utation purposes. Member�s Death While Attive ELigibility - Spouse legally married to member at least one year before separation from service and residing uith member at the time of death. Child - Under the age of 18 and was born uithin nine (9) months after death of inember. Benefits Spouse - Eniitted to 100% of benefits of inemher. Chitd - If a surviving spouse , there is no additional benefit. If there is no survSving spouse, t00X benefiY to be shared prorating with other surviving children untit the age of majority. Vested Deferred Must be a member of the association for ten (10) years and served tuenty (20) years in the Roseville Fire Department and separated before the age of fifty (50>. Deferral is unti� after the age of fifty (50) and regutar benefit requirements are met. A variety of significant actuari al assumptions are used to determine the standardized measure ot the pension benefit obligation and these assumptions are sumnarized below: � The present value of future pension paymerts uas compuTed by using a discount rate of five percent. The discount rete is equal to the estimated tong-term rate of return on current and future investments of the pension ptan. * Future pension payments refLect no post-retirement benefit increases, which is consistent uith The ierms of the pension agreemenC. Funding Status and Progress - The amount shown betou as The "pension 6enefit obtigation" is a standardized disclosure measure of the present vatue of pension 6enefits, adjusted for the effects of projected salary increases (if any) and step-rate benefits, estimaied to be payabte in the future as a result of service to date. The measure is intended to heLp users assess the funding status of the associaiion on a going-roncern 6asis, assess progress made in accumulating sufficien[ assets to pay benefits when due, and make comparisons among employers. The measure is ihe actuariaL present value of credited projected benefits and is independent of the funding meihod used to dexermine contributions to the associa2ion. - 48