TO: Participants, Retirees, and School Boards
FROM: Howard Van Mersbergen, Executive Secretary-Treasurer
An Actuarial Valuation as of September 1, 1996, shows that the Plan remains fully funded. As of the valuation, the Plan had a surplus of $2,426,100 generated by the actuarial adjusted asset value of $52,958,700 exceeding the accrued liability of $50,532,600.
The Trustees and CSI Board of Directors have approved the following changes effective September 1, 1996:
1. Final Average Earnings Calculation Date
The date up to which the Plan recognizes earnings for the calculation of an individual’s Final Average Earnings was moved from September 1, 1998, to September 1, 1999. The goal is to always have this date be in the future so that all of an individual’s earnings are used in calculating the Final Average Earnings.
2. Enhanced Final Average Earnings Calculation
Final Average Earnings have been calculated by using the average of the best three consecutive years out of the last ten. The calculation will be enhanced by replacing the ten year period with twenty years. This will assure that participants receive a pension based on the highest possible Final Average Earnings.
3. Portability of Benefits
Changes were made to clarify that vested participants whose employment terminates prior to being eligible for early retirement benefits (age 55) can elect to transfer the commuted value of their pension from the Plan or elect to receive a pension at an early or the normal retirement age. Vested participants whose employment terminates after being eligible for early retirement benefits (age 55) can elect to begin receiving a pension benefit at their chosen early or normal retirement date.
4. Credited Service For Employer-Funded Sabbaticals
Participants receive credited participating service while on employer-funded sabbaticals. The amount of the credited participating service received during the sabbatical is calculated proportionally using the salary and credited service earned during the year prior to the leave. For example: if the participant earned $20,000 at 100% full time during the year prior to the leave and was paid $10,000 during the leave, he would receive 50% credited service for the time spent on sabbatical.