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TOWN OF MASHPEE, MASSACHUSETTS <br /> NOTES TO FINANCIAL STATEMENTS <br /> JUNE 30, 1990 <br /> Members of bath systems became vested after ten years of creditable <br /> service. A retirement allowance may be received upon reaching the age <br /> R,}et <br /> of 8.�t or upor, attaining twenty years of service. The plan also <br /> provides for early retirement at age 55 if the participant: ti) has a �� ' <br /> record of ter, years of creditable service, (2) was on the town payroll I�" • <br /> on January 1, 1978, (3) voluntarily left town employment on or after <br /> that date and (4) left accumulated annuity deductions in the fund. <br /> Active members contribute either 5X, 7%, or 8% of their grass regular <br /> compensation depending on the date which their membership began. <br /> The system also provides death and disability benefits. <br /> The accounting records of the Retirement System are maintained on a <br /> calendar year basis in accordance with standards and procedures estab- <br /> lished by the Commissioner of Public Employee Retirement Administra- <br /> tion. <br /> B. Funding Status and Progress <br /> The amount showy, below as the "pension benefit obligation" for the <br /> BCRS is a standardized disclosure measure of the present value of pen- <br /> sion bereefits, adjusted for the effects of projected salary increases <br /> and step-rate benefits, estimated to be payable in the future as a <br /> result of employee service to date. The measure is intended to help <br /> users assess the funding status of the system or, a going-concert, <br /> basis, assess progress made in accumulating sufficient assets to pay <br /> benefits when due, and make comparisons among employers. The measure <br /> is the actuarial present value of credited projected benefits and is <br /> independent of the funding method used to determine contributions to <br /> the system. <br /> The pension benefit obligation was computed as part of an actuarial <br /> valuatior, performed as of January 1, 1987. Significant actuarial as- <br /> sumptions used in the valuation include: (a) a rate of return on the <br /> investment of present arid future assets of 8% a year compounded an- <br /> nually, tb) projected salary increases of 4. 5% a year compounded an- 'y <br /> nually, attributed to inflation, (c) additional projected salary in- tire. <br /> creases of 1.57 a year attributable to longevity/merit and (d) no <br /> r <br /> post-retirement benefit increases. <br /> 24 <br />