Annual Report 2014

City of Surrey

Notes to the Consolidated Financial Statements For the year ended December 31, 2014 [tabular amounts in thousands of dollars]

11. Employee future benefits (continued)

An actuarial valuation for these benefits was performed to determine the City’s accrued benefit obligation as at December 31, 2014. The difference between the actuarially determined accrued benefit obligation of $23.1 million and the accrued benefit liability of $24.5 million as at December 31, 2014 is an unamortized actuarial gain of $1.4 million. The actuarial gain is amortized over a period equal to the employees’ average remaining service lifetime of 11 years.

2014

2013

Accrued benefit obligation: Balance, beginning of year

$ 21,128

$

26,836

1,610

Current service cost

1,736

865

Interest cost

961

1,280

Actuarial loss (gain)

(7,059)

(1,776)

Benefits paid

(1,346)

$ 23,107

Accrued benefit obligation, end of year

$

21,128

Reconciliation of accrued benefit obligation to accrued benefit liability:

2014

2013

$ 23,107

Actuarial benefit obligation, end of year

$

21,128

1,413

Unamortized actuarial gain

2,753

Accrued benefit liability, end of year

$ 24,520

$

23,881

Actuarial assumptions used to determine the City’s accrued benefit obligation are as follows: 2014

2013

Discount rate

3.20% 2.50%

4.00%

Expected future inflation rate

2.50%

0.50%

Expected wage and salary range increases

0.50%

11.0

11.0

Employee average remaining service life (years)

25