Financial Annual Report 2016
NOTESTOTHE CONSOLIDATED FINANCIAL STATEMENTS CITY OF SURREY
For the year ended December 31, 2016 [tabular amounts in thousands of dollars]
11. EMPLOYEE FUTURE BENEFITS
The City provides certain post-employment and sick leave benefits to its employees. These benefits include accumulated non-vested sick leave, post-employment service pay and post-retirement top-ups for dental, life insurance and accidental death, dismemberment insurance, vacation deferral, supplementary vacation and benefit continuation for disabled employees. The liability associated with these benefits is calculated based on the present value of expected future payments pro-rated for services, and is included in accounts payable and accrued liabilities. An actuarial valuation for these benefits was performed to determine the City’s accrued benefit obligation as at December 31, 2016. The difference between the actuarially determined accrued benefit obligation of $25.4 million and the accrued benefit liability of $26.9 million as at December 31, 2016 is an unamortized actuarial gain of $1.5 million. The actuarial gain is amortized over a period equal to the employees’ average remaining service lifetime of 11 years.
2015
Accrued benefit obligation: Balance, beginning of year
2016
$
23,107
$
23,687
Current service cost
1,803
1,901
Interest cost
766
789 304
Actuarial loss (gain)
(480)
Benefits paid
(1,509)
(1,317)
Accrued benefit obligation, end of year
$
23,687
$
25,364
Reconciliation of accrued benefit obligation to accrued benefit liability:
2015
2016
$
23,687
Actuarial benefit obligation, end of year
$
25,364
Unamortized actuarial gain
1,968
1,539
Accrued benefit liability, end of year
$
25,655
$
26,903
Actuarial assumptions used to determine the City’s accrued benefit obligation are as follows:
2015
2016
Discount rate
3.20% 2.50% 0.50%
3.20% 1.80% 0.50%
Expected future inflation rate
Expected wage and salary range increases Employee average remaining service life (years)
11.0
11.0
56
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