2018 Annual Report

Notes to the Consolidated Financial Statements

Consolidated Financial Statements

For the year ended December 31, 2018

10. Employee Future Benefits The City provides employee future benefits in the form of severance benefits and vested and non-vested sick leave to qualifying employees. These benefits are not separately funded. Severance benefits are cash settlements paid to employees who cease their employment with the City after a specified period of time. Employees hired before February 11, 1999 qualify for five days pay per year of employment, provided they either work a minimum of 20 years with the City or retire as defined by the Public Sector Pension Plan Act. Full time employees hired after February 11, 1999 qualify for 20 days pay provided they work a minimum of 10 years with the City and retire as defined by the Public Sector Pension Plan Act. The City permits regular employees to accumulate up to 18 days per year of service for future illnesses up to a maximum of 250 days. For certain qualifying employees a portion of this benefit vests; for the balance, this benefit does not vest and cannot be converted to any other type of benefit. An actuarial valuation of these benefits was performed to determine the City's liability and accrued benefit obligation as at December 31, 2018. The valuation resulted in an unamortized actuarial gain of $861,200 at December 31, 2018, (unamortized loss of $364,900 for 2017). Actuarial gains or losses are amortized over the expected average remaining service life of employees. The benefit liability at December 31, 2018 was $4,662,100, ($4,657,300 for 2017) comprised as follows: 2018 2017 Accrued benefit obligation, beginning of year $ 4,932,200 $ 5,102,900 Add: Current service costs 397,600 343,800 Interest on accrued benefit obligation 143,900 148,300 Actuarial (gain)/loss (1,192,800) - Less: Benefits paid during the year (480,000) (662,800) Accrued benefit obligation, end of year 3,800,900 4,932,200

Add (Less): Unamortized actuarial gain (loss)

861,200

(364,900) 4,567,300

Accrued benefit liability

4,662,100

Actuarial assumptions used to determine the City's accrued benefit obligation are as follows: 2018

2017 2.90 % 2.00 % 3.04 %

Discount rate (long-term borrowing rate)

3.00 % 2.00 % 2.68 %

Expected future inflation rate

Merit and inflationary wage and salary increases averaging Estimated average remaining service life of employees (years)

11.0

13.0

50 City of Maple Ridge - 2018 Annual Report