Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90Seattle City Light 2015 Annual Report THE CITY OF SEATTLE—CITY LIGHT DEPARTMENT NOTES TO FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014 - 52 - SCERS Annual Pension Cost and Net Pension Obligation For Fiscal Year Ending December 31, 2014 Based on January 1, 2013 Valuation* Fiscal Year Ended December 31 ($ in millions) 2014 1a Total normal cost rate 14.95 % 1b Employee contribution rate 10.03 % 1c Employer normal cost rate (1a-1b) 4.92 % 2a Total employer contribution rate 14.31 % 2b Amortization payment rate (2a-1c) 9.39 % 2c Amortization period* 35 years 2d GASB 27 amortization rate 10.68 % 3 Total annual required contribution (ARC) rate (1c+2d)** 16.50 % 4 Covered employee payroll*** 598.0 $ 5a ARC (3x4) 83.9 $ 5b Interest on net pension obligation (NPO) (0.2) 5c ARC adjustment 0.1 5d Annual pension cost (APC) (5a+5b+5c) 83.8 $ 6 Employer contribution 77.1 $ 7a Change in NPO (5d-6) 6.7 $ 7b NPO at beginning of year (2.6) 7c NPO at end of year (7a+7b) 4.1 $ * ** *** **** Beginning with the January 1, 2013 actuarial valuation report, GASB calculations take into account the lag between determination of the actuarial contribution rate. For example, the January 1, 2012 actuarial valuation calculates the contribution rate beginning January 1, 2013 (for fiscal year ending December 31, 2013). This change was made due to SCERS' new funding policy, adopted in 2011, to contribute the actuarially determined contribution rate (previously, a fixed rate was contributed). If the amortization period determined by the actual contribution rate exceeds the maximum amortization period required by GASB Statement No. 27, the ARC is determined using an amortization of the UAAL over 30 years. Covered payroll includes compensation paid to all active employees on which contributions were made in the year preceding the valuation date. Items 5a-5d were calculated using prior year total ARC rate. In 2012, total ARC rate was 11.84%. 52