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HomeMy WebLinkAbout2014 - 27245 LBWL Lansing Board of Water and Light Retiree Benefit Plan and Trust Lansing Board of Water and Light Retiree Benefit Plan and Trust Financial Report with Required Supplemental Information June 30, 2014 Lansing Board of Water and Light Retiree Benefit Plan and Trust Contents Report Letter 1-2 Management's Discussion and Analysis 3-4 Financial Statements Statement of Trust Net Position 5 Statement of Changes in Trust Net Position 6 Notes to Financial Statements 7-16 Required Supplemental Information 17 Schedule of Funding Progress 18 Schedule of Employer Contributions 19 Independent Auditor's Report To the Honorable Mayor, Members of the City Council, and Commissioners of the Board of Water and Light Lansing Board of Water and Light Retiree Benefit Plan and Trust City of Lansing, Michigan Report on the Financial Statements We have audited the accompanying financial statements of Lansing Board of Water and Light Retiree Benefit Plan and Trust (the "Plan") as of and for the years ended June 30, 2014 and 2013 and the related notes to the financial statements, which collectively comprise the Plan's basic financial statements as listed in the table of contents. Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor's Responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. I To the Honorable Mayor, Members of the City Council, and Commissioners of the Board of Water and Light Lansing Board of Water and Light Retiree Benefit Plan and Trust Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the trust net position of the Lansing Board of Water and Light Retiree Benefit Plan and Trust as of June 30, 2014 and 2013 and the changes in its trust net position for the years then ended, in accordance with accounting principles generally accepted in the United States of America. Other Matters Required Supplemental Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, schedule of funding progress, and schedule of employer contributions, as identified on the table of contents, be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, which considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplemental information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. PLLC September 2, 2014 2 Lansing Board of Water and Light Retiree Benefit Plan and Trust Management's Discussion and Analysis Using this Annual Report This annual report consists of two parts: (1) management's discussion and analysis (this section) and (2) the basic financial statements. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. Condensed Financial Information The table below compares key financial information in a condensed format between the current year and the prior two years: 2014 2013 2012 Assets held in trust: Cash and money market trust funds $ 5,71 1,439 $ 8,498,919 $ 6,666,106 Corporate bonds and notes 20,713,869 19,321,385 18,602,251 Government bonds and notes 16,284,339 13,019,316 12,723,224 Equities 108,540,537 86,128,263 69,522,814 Mutual funds and other 2,259,641 1,950,935 1,961,220 Interest and dividend receivable 211,625 185,624 194,729 Total plan assets $ 153,721,450 $ 129,104,442 $ 109,670,344 Changes in net position: Net investment income (loss) $ 25,667,779 $ 15,71 1,575 $ (405,257) Employer contributions 9,266,529 14,045,204 15,854,530 Retiree benefits paid (9,266,529) (9,524,120) (9,416,763) Administrative fees (1,050,771) (798,561) (747,493) Net change in net position $ 24,617,008 $ 19,434,098 $ 5,285,017 During fiscal year 2014, net investment gains were $25.7 million. We believe this performance is in line with the overall level of returns experienced by similarly situated institutional investors. The employer contributions were down by $4.8 million due to the decrease in the Board of Water and Light - City of Lansing, Michigan's (the "BWL") annual required contribution (ARC) as determined by the BWL's actuary. 3 Lansing Board of Water and Light Retiree Benefit Plan and Trust Management's Discussion and Analysis (Continued) Investment Objectives and Asset Allocation The Plan's assets shall be invested in accordance with sound investment practices that emphasize long-term investment fundamentals. In establishing the investment objectives of the Plan, the BWL has taken into account the time horizon available for investment, the nature of the Plan's cash flows and liabilities, and other factors that affect the Plan's risk tolerance. Consistent with this, the BWL has determined that the investment objective is income and growth. This investment objective is a balanced approach that emphasizes a stable and substantial source of current income and some capital appreciation over the long term. Consistent with the advice of the investment advisor, the BWL has selected the following target asset allocation strategy: Domestic large capitalization stocks 43.2% Domestic small capitalization stocks 10.0% International stocks 10.7% U.S. core fixed income 31. 1% Private equity 5.0% Investment Results The fiscal year ended June 30, 2014 saw a net investment gain of$24.6 million. We believe this performance is in line with the overall level of recovery experienced by the stock and bond markets. Future Events The BWL is funding its other postemployment benefits (OPEBs) and is intending to meet its annual required contributions (ARC) in part by making contributions into the VEBA Trust Fund. Contacting the Plan's Management This financial report is intended to provide a general overview of the Plan's finances and to show accountability for the money it receives. If you have questions about this report or need additional information, we welcome you to contact the office of Susan Devon, Chief Administrative and Technology Officer, at P.O. Box 13007, Lansing, Michigan 48901-3007. 4 Lansing Board of Water and Light Retiree Benefit Plan and Trust Statement of Trust Net Position June 30 2014 2013 Assets Investments - Fair value: Cash and money market trust funds $ 5,71 1,439 $ 8,498,919 Corporate bonds and commercial paper 20,713,869 19,321,385 Government bonds and notes 16,284,339 13,019,316 Equities 108,540,537 86, 128,263 Mutual funds 2,259,641 1 ,950,935 Total investments at fair value 153,509,825 128,918,818 Investment interest and dividend receivable 211,625 185,624 Trust Net Position $ 153,721,450 $ 129,104,442 See Notes to Financial Statements. 5 Lansing Board of Water and Light Retiree Benefit Plan and Trust Statement of Changes in Trust Net Position Year Ended June 30 2014 2013 Increase Investment income: Net appreciation in fair value of investments $ 22,774,150 $ 12,938,049 Interest and dividend income 2,893,629 2,773,526 Total investment income 25,667,779 15,71 1 ,575 Employer contributions 9,266,529 14,045,204 Total increase 34,934,308 29,756,779 Decrease Retiree benefits paid 9,266,529 9,524, 120 Administrative expenses 1,050,771 798,561 Total decrease 10,317,300 10,322,681 Net Increase in Trust Net Position 24,617,008 19,434,098 Net Position Beginning of year 129,104,442 109,670,344 End of year $ 153,721,450 $ 129,104,442 See Notes to Financial Statements. 6 Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note I - Description of the Plan The following description of the Lansing Board of Water and Light Retiree Benefit Plan and Trust (the "Plan"), a trust fund of the Board of Water and Light - City of Lansing, Michigan (the "BWL"), provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan's provisions. General - The Plan was established on October 20, 1999, effective as of July 1, 1999, to constitute a voluntary employee beneficiary association (VEBA) under Section 501(c)(9) of the Internal Revenue Code of 1986, as amended. The Plan was formed for the purpose of accumulating assets sufficient to fund retiree healthcare insurance costs in future years. The Plan is a single-employer defined benefit healthcare plan. The Plan provides medical, dental, and life insurance benefits in accordance with Section 5-203 of the City Charter. Substantially all of the BWL's employees may become eligible for healthcare benefits and life insurance benefits if they reach normal retirement age while working for the BWL. There were 698 participants eligible to receive benefits at June 30, 2014 and 692 participants eligible at June 30, 2013. Contributions to the Plan are a combination of amounts contributed by the BWL to the Plan and the direct cost of benefits paid to participants from the BWL's general cash flow. During the years ended June 30, 2014 and 2013, the cost to BWL of maintaining the Retiree Benefit Plan was $9,266,529 and $14,045,204, respectively, of which $0 and $4,521,084 was contributed to the VEBA trust and $9,266,529 and $9,524,120, respectively, was incurred as direct costs of benefits. Benefits - Benefits shall not be paid from this Plan to participants or their beneficiaries during a plan year in which there has been a "qualified transfer" pursuant to Internal Revenue Code Section 420(e)(1)(8) from the Lansing Board of Water and Light Defined Benefit Plan for the Employees' Pensions, except that once the "qualified transfer" has been exhausted for the purpose of paying qualified current retiree health liabilities, benefit payments may be made under this Plan consistent with Internal Revenue Code Section 420(e)(1)(B). After "qualified transfers" have been exhausted, benefits paid under this Plan shall be those benefits described in the relevant sections of the Postretirement Benefit Plan for Eligible Employees of the Lansing Board of Water and Light. Trustees - Each member of the Lansing Board of Water and Light board of commissioners is a trustee during the term of office as a commissioner. The trustees have appointed Merrill Lynch, Pierce, Fenner & Smith Incorporated as custodian of the Plan's assets. 7 Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note I - Description of the Plan (Continued) Contributions - The Lansing Board of Water and Light makes contributions in such a manner and at such times as appropriate. All contributions received, together with the income thereon, are held, invested, reinvested, and administered by the trustees pursuant to the terms of the plan agreement. No employee contributions are allowed under this Plan. Contributions are recognized when due and when the amount to be contributed is committed by the BWL. Participation - Participation in this Plan is determined in accordance with the terms of the Postretirement Benefit Plan for Eligible Employees of the Lansing Board of Water and Light. At June 30, 2014, there were 698 active participants (not eligible to receive benefits), 80 disabled participants, 476 retired participants, 473 active spouses (not eligible to receive benefits), and 152 surviving spouses participating in the Plan. At June 30, 2013, there were 681 active participants (not eligible to receive benefits), 82 disabled participants, 457 retired participants, 488 active spouses (not eligible to receive benefits), and 140 surviving spouses participating in the Plan. Vesting - Benefits become payable in accordance with the terms of the Postretirement Benefit Plan for Eligible Employees of Lansing Board of Water and Light. At no time will benefits of the Postretirement Benefit Plan for Eligible Employees of Lansing Board of Water and Light be vested. The BWL may reduce or eliminate any or all plan benefits at any time, subject to the requirements of any collective bargaining agreement. Termination - In the event of plan termination, all plan assets shall be used to purchase additional eligible benefits in accordance with the terms of the plan agreement. In the event of dissolution, merger, consolidation, or reorganization of the BWL, the Plan shall terminate and liquidate in a manner consistent with the plan agreement unless the Plan is continued by a successor to the BWL. Note 2 - Summary of Significant Accounting Policies Accounting and Reporting Principles The Plan follows accounting principles generally accepted in the United States of America (GAAP) as applicable to governmental units. Accounting and financial reporting pronouncements are promulgated by the Government Accounting Standards Board. Basis of Accounting Fiduciary funds use the economic resources measurement focus and the full accrual basis of accounting. Revenue is recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Plan member contributions are recognized in the period in which the contributions are due. Employer contributions to the Plan are recognized when due pursuant to legal requirements. 8 Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note 2 - Summary of Significant Accounting Policies (Continued) Benefits and refunds are recognized when due and payable in accordance with the terms of the Plan. Report Presentation This report includes the fund-based statements of the Plan. Investment Valuation and Income Recognition - Plan investments are reported at fair value. Securities traded on a national or international exchange are valued at the last reported sales price. Purchases and sales of investments are recorded on a trade-date basis. Appreciation or depreciation of investments is calculated based on the beginning of the period's fair value of investments. Expenses - Substantially all costs and expenses incurred in connection with the operation and administration of the Plan are paid by the BWL, the plan sponsor. The Plan pays all transaction expenses incurred in connection with the investment accounts, which are netted with investment income. Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. Funding Policy - The BWL adopted a process for funding the retiree benefits using both a VEBA trust and, to the extent permitted by law, excess pension assets in the Defined Benefit Pension Plan. Additional contributions to the VEBA trust from BWL operating funds to supplement Section 420 transfers will not exceed the recommended annual contribution amount required to cover current service of active participants and amortize the unfunded accrued liability over 30 years. The required contribution is based on a projected pay-as-you-go financing requirement with an additional amount to prefund benefits. The BWL's annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities over a period of 30 years. 9 Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note 2 - Summary of Significant Accounting Policies (Continued) Contribution trend information is as follows (in thousands): Percentage of Annual OPEB Fiscal Year Annual OPEB Annual OPEB Cost Ended Cost Contributed Contributed 6/30/2012 $ 15,774 $ 15,854 101% 6/30/2013 13,994 14,045 100% 6/30/2014 9,202 9,268 101% Funded Status and Funding Progress - Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Significant actuarial assumptions used in determining the annual OPEB cost at June 30, 2014 and 2013 include (a) rate of return on the investments of present and future assets of 7.5 percent, compounded annually, (b) projected healthcare trend rates ranging from 5.0 percent to 9.0 percent, and (c) amortization method level dollar over an open 30-year period. Funding status and funding progress trend information is as follows (in thousands): Unfunded AAV as a Actuarial Actuarial Accrued Actuarial Percentage Valuation Date Asset Value Liability Accrued Liability of AAL 2/29/2012 $ 110,029 $ 245,418 $ 135,389 44.83% 2/28/2013 123,195 207,864 84,669 59.27% 2/28/2014 148,307 194,365 46,058 76.30% 10 Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note 2 - Summary of Significant Accounting Policies (Continued) Actuarial Assumptions - Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplemental information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities consistent with the long- term perspective of the calculations. The Plan has calculated the accrued actuarial liability and required contribution using certain methods and assumptions. Benefit payments have been computed using the individual entry age normal method. The assets have been valued in the actuary report using the fair market value. The healthcare cost trend rates used range from 5.0 to 9.0 percent for the years ended June 30, 2014 and 2013. Note 3 - Cash, Investments, and Fair Disclosure The Lansing Board of Water and Light Retiree Benefit Plan and Trust has adopted GASB No. 40, Deposit and Investment Risk Disclosures. The modified disclosures required by GASB No. 40 are reflected below. The Plan is authorized through Public Act 149 of 1999 to invest in accordance with Public Act 314. Public Act 314 of 1965, as amended, allows the Plan to invest in certain reverse repurchase agreements, stocks, diversified investment companies, annuity investment contracts, real estate leased to public entities, mortgages, real estate, debt or equity of certain small businesses, certain state and local government obligations, and certain other specified investment vehicles. The Plan's deposits and investment policies are in accordance with PA 196 of 1997 and have authorized the investments according to Michigan PA 314 of 1965, as amended. II Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note 3 - Cash, Investments, and Fair Disclosure (Continued) The Plan's cash and investments are subject to several types of risk, which are examined in more detail below: Risks at June 30, 2014 Custodial Credit Risk of Bank Deposits Custodial credit risk is the risk that in the event of a bank failure, the Plan's deposits may not be returned to it. The Plan requires that financial institutions must meet minimum criteria to offer adequate safety to the Plan. The Plan evaluates each financial institution with which it deposits funds and only those institutions meeting minimum established criteria are used as depositories. Custodial Credit Risk of Investments Custodial credit risk is the risk that, in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Plan does not have a policy for custodial credit risk. At year end, all investments of the Plan were held in the name of the Board of Water and Light and are therefore not subject to custodial credit risk. Interest Rate Risk Interest rate risk is the risk that the value of investments will decrease as a result of a rise in interest rates. The Plan's investment policy does not restrict investment maturities. At year end, the average maturities of investments are as follows: Weighted Average Investment Fair Value Maturity Government bonds and notes $ 16,284,339 11.46 years Corporate bonds and notes 20,713,869 13.89 years Money market trust funds 5,388,690 Less than I year 12 Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note 3 - Cash, Investments, and Fair Disclosure (Continued) Credit Risk State law limits investments in commercial paper to the top two ratings issued by nationally recognized statistical rating organizations. The Plan has no investment policy that would further limit its investment choices. As of year end, the credit quality ratings of debt securities (other than the U.S. government) are as follows: Investment Fair Value Rating Rating Organization Corporate bonds $ 2,592,281 AAA S&P Corporate bonds 7,599,714 AA+ S&P Corporate bonds 409,881 AA S&P Corporate bonds 325,014 AA- S&P Corporate bonds 814,828 A+ S&P Corporate bonds 1,459,545 A S&P Corporate bonds 2,435,470 A- S&P Corporate bonds 1,519,586 BBB+ S&P Corporate bonds 1,243,225 BBB S&P Corporate bonds 847,165 BBB- S&P Corporate bonds 139,359 BB+ S&P Corporate bonds 217,310 BB S&P Corporate bonds 171,619 BB- S&P Corporate bonds 48,487 B+ S&P Corporate bonds 36,750 B S&P Corporate bonds 142,363 B- S&P Corporate bonds 645,767 CCC S&P Corporate bonds 65,505 D S&P Money market trust funds 5,388,690 Not rated Not rated Concentration of Credit Risk The Board of Commissioners places no limit on the amount the Plan may invest in any one issuer. 13 Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note 3 - Cash, Investments, and Fair Disclosure (Continued) Risks at June 30, 2013 Custodial Credit Risk of Bank Deposits Custodial credit risk is the risk that in the event of a bank failure, the Plan's deposits may not be returned to it. The Plan requires that financial institutions must meet minimum criteria to offer adequate safety to the Plan. The Plan evaluates each financial institution with which it deposits funds and only those institutions meeting minimum established criteria are used as depositories. Custodial Credit Risk of Investments Custodial credit risk is the risk that, in the event of the failure of the counterparty, the Plan will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Plan does not have a policy for custodial credit risk. At year end, all investments of the Plan were held in the name of the Board of Water and Light and, therefore, are not subject to custodial credit risk. Interest Rate Risk Interest rate risk is the risk that the value of investments will decrease as a result of a rise in interest rates. The Plan's investment policy does not restrict investment maturities. At year end, the average maturities of investments are as follows: Weighted Average Investment Fair Value Maturity Government bonds and notes $ 13,019,316 12. 14 years Corporate bonds and notes 19,321,385 14.67 years Money market trust funds 5,679,922 Less than I year 14 Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note 3 - Cash, Investments, and Fair Disclosure (Continued) Credit Risk State law limits investments in commercial paper to the top two ratings issued by nationally recognized statistical rating organizations. The Plan has no investment policy that would further limit its investment choices. As of year end, the credit quality ratings of debt securities (other than the U.S. government) are as follows: Investment Fair Value Rating Rating Organization Corporate bonds $ 2,665,293 AAA S&P Corporate bonds 7,164,975 AA+ S&P Corporate bonds 313,858 AA S&P Corporate bonds 358,219 AA- S&P Corporate bonds 998,377 A+ S&P Corporate bonds 1,250,910 A S&P Corporate bonds 2,074,030 A- S&P Corporate bonds 736,143 BBB+ S&P Corporate bonds 1,671,545 BBB S&P Corporate bonds 549,653 BBB- S&P Corporate bonds 181,288 BB+ S&P Corporate bonds 225,628 BB S&P Corporate bonds 224,763 BB- S&P Corporate bonds 19,350 B+ S&P Corporate bonds 121,588 B S&P Corporate bonds 229,346 B- S&P Corporate bonds 488,732 CCC S&P Corporate bonds 47,687 D S&P Money market trust funds 5,679,922 Not rated Not rated Concentration of Credit Risk The Board of Commissioners places no limit on the amount the Plan may invest in any one issuer. 15 Lansing Board of Water and Light Retiree Benefit Plan and Trust Notes to Financial Statements June 30, 2014 and 2013 Note 4 - Net Appreciation of Investments The net appreciation (depreciation) of the Plan's investments is as follows: 2014 2013 Investments at fair value as determined by quoted market price: Corporate bonds and notes $ 451,415 $ 284,652 Government bonds and notes 188,304 (576,489) Equities 21,775,370 12,21 1,563 Alternative investments 40,441 15,276 Mutual funds 318,620 1,003,047 Total $ 22,774,150 $ 12,938,049 Note S - Tax Status The Plan is exempt under Internal Revenue Code Section 501(c)(9) and received an exemption letter as of February 9, 2000. The Plan has since been amended. Management believes the Plan continues to operate as a qualified plan. 16 Required Supplemental Information 17 Lansing Board of Water and Light Retiree Benefit Plan and Trust Schedule of Funding Progress (in thousands) Valuation Actuarial Funded Date Asset Value AAL UAAL Ratio 2/28/2007 $ 52,335 $ 198,005 $ 145,670 26.43% 2/29/2008 57,246 236,102 178,856 24.25% 2/28/2009 45,320 256,888 211,568 17.64% 2/28/2010 76, 117 252,142 176,025 30. 19% 2/28/2011 100,604 260,097 159,493 38.68% 2/28/2012 110,029 245,418 135,389 44.83% 2/28/2013 123, 195 207,864 84,669 59.27% 2/28/2014 148,307 194,365 46,058 76.30% AAL - Actuarial accrued liability (projected unit credit accrued liability) UAAL - Unfunded actuarial accrued liability and negative UAAL indicate a funding excess. 18 Lansing Board of Water and Light Retiree Benefit Plan and Trust Schedule of Employer Contributions (in thousands) Employer Contributions Percentage Fiscal Year of ARC Ended Required Actual Contributed 6/30/2007 $ 17,867 $ 18,090 101% 6/30/2008 14,797 14,962 101% 6/30/2009 18,132 17,866 99% 6/30/2010 21,291 21,318 100% 6/30/201 1 17,300 17,236 100% 6/30/2012 15,744 15,854 101% 6/30/2013 13,994 14,045 100% 6/30/2014 9,200 9,268 101% ARC - Annual required contribution 19