Employees Covered by Benefit Terms As of the June 30, 2019 actuarial valuation, the following employees were covered by the benefit terms of the VRS Retirement Plan: Active members Inactive members or their beneficiaries currently receiving benefits Inactive members: Vested Non-vested Active elsewhere in VRS Total inactive members Total covered employees Contributions The contribution requirement for active employees is governed by Section 51.1-145 of the Code of Virginia, as amended, but may be impacted as a result of funding options provided to political subdivisions by the Virginia General Assembly. Employees are required to contribute 5% of their annual base compensation toward their retirement. Prior to July 1, 2012, all or part of the 5% member contribution may have been assumed by the employer. Beginning July 1, 2012 new employees were required to pay the 5% member contribution. In addition, for existing employees, employers were required to begin making the employee pay the 5% member contribution. This could be phased in over a period of up to 5 years and the employer was required to provide a salary increase equal to the amount of the increase in the employee-paid member contribution. The Authority’s contractually required contribution rate for fiscal year 2020 was 10.5% of covered employee compensation. This rate was based on an actuarially determined rate from an actuarial valuation as of June 30, 2019. This rate, when combined with employee contributions, was expected to finance the costs of benefits earned by an employee during the year, with an additional amount to finance any unfunded accrued liability. The total of employer and employee contributions to VRS were approximately $3.7 million for each of the years ended June 30, 2020 and June 30, 2019. (b) Net Pension Liability The Authority’s net pension liability (NPL) was measured as of June 30, 2019. The TPL used to calculate the NPL was determined by an actuarial valuation performed as of June 30, 2018, using updated actuarial assumptions applied to all periods included in the measurement and date of June 30, 2019. Actuarial Assumptions The TPL was based on an actuarial valuation as of June 30, 2018, using the Entry Age Normal actuarial cost method and the following assumptions, applied to all periods included in the measurement and rolled forward to the measurement date of June, 30 2019. Inflation Salary increases, including inflation Investment rate of return 2.5% 3.5% - 5.35% 6.75%, net of plan investment expense, including inflation* * Administrative expenses as a percent of the market value of assets for the last experience study were found to be approximately 0.06% of the market assets for all of the VRS plans. This would provide an assumed investment return rate for GASB purposes of slightly more than the assumed 6.75%,. However, since the difference was minimal, and a more conservative 6.75% investment return assumption provided a projected plan net position that exceeded the projected benefit payments, the long-term expected rate of return on investments was assumed to be 6.75% to simplify preparation of pension liabilities. Number 320 128 19 59 20 98 546 NOTES TO FINANCIAL STATEMENTS FINANCIAL SECTION 59
Prince William County Service Authority | 4 County Complex Court Woodbridge, VA 22192