CITY OF MYRTLE BEACH, SOUTH CAROLINA NOTES TO FINANCIAL STATEMENTS June 30, 2010
Note 14 - RETIREMENT PLANS
A. Plan Description
City employees participate in either the South Carolina Police Officers Retirement System (PORS) or the South Carolina Retirement System (SCRS) depending on their duties. Both plans are administered by the South Carolina Retirement Systems and are classified as cost-sharing multiple-employer defined benefit public retirement systems. Each plan provides retirement, disability and death benefits to plan members and beneficiaries. Benefit provisions are established under authority of Title 9 of the South Carolina Code of Laws. The South Carolina Retirement Systems issue a Comprehensive Annual Financial Report which discloses detailed information regarding benefit provisions and actuarial information. This report is available to the public and may be obtained by writing to the South Carolina Retirement Systems, Post Office Box 11960, Columbia, South Carolina 29211.
B. Funding Policy
Members of the PORS and SCRS are required to contribute 6.50% of their covered wages. The City is required to contribute at actuarially determined rates, currently 11.05% of PORS member wages and 9.39% of SCRS member wages. The contribution requirements of plan members and the City are established and may be amended by the South Carolina Retirement Systems. The City’s contributions to the PORS for the years ended June 30, 2010, 2009 and 2008 were $2,065,688, $2,055,999 and $1,812,777, respectively. The City’s contributions to the SCRS for the years ended June 30, 2010, 2009 and 2008 were $1,845,647, $1,839,695 and $1,673,366, respectively. The contributions made by the City to the PORS and SCRS, as shown above, were equal to the required contributions for each year.
Note 15 - POSTEMPLOYMENT HEALTH CARE PLAN
The City retiree health care plan is a defined contribution pension plan administered by Vested Health. The plan provides eligible retirees with a health reimbursement account which can be used to fund medical and dental costs. An eligible retiree has completed at least twenty years of service as an employee of the City and is receiving benefits from the South Carolina Retirement System. Benefit provisions are established and may be amended by City Council.
The City is required to annually contribute an amount which will provide each employee with a $100,000 health reimbursement account after twenty years of service as an employee of the City. Plan members are not required to contribute to the plan. The City’s required contribution for the year ended June 30, 2010 was $2,932,292. During the year ended June 30, 2010, the City contributed $546,924 to the plan. The contribution requirements of plan members and the City are established and may be amended by City Council.
Note 16 - RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City established the Self Insurance Fund, an internal service fund, to account for and finance its uninsured risks of loss for worker’s compensation, general liability and property damage. Under this program, the Self Insurance Fund provides coverage for up to a maximum of $400,000 for each worker’s compensation claim, $250,000 for each general liability claim and $25,000 for each property damage claim. The City purchases commercial insurance for claims in excess of coverage provided by the Self Insurance Fund. Settled claims have not exceeded the City’s commercial coverage in any of the past three years.
The Self Insurance Fund allocates the costs of providing claims servicing and claims payment to other funds by charging them a “premium” based on estimates of the amounts needed to pay prior and current claims. At June 30, 2010, the Self Insurance Fund has a claim liability of $2,704,725. The liability is based on the requirements of Governmental Accounting Standards Board Statement No. 10 which requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. A summary of changes in the Self Insurance Fund’s claims liability during the years ended June 30, 2010 and 2009 follows: