Discussion and Review of FY 2026-2027 Budget

City of Tiffin Notes to Basic Financial Statements NOTE 4 – PENSION PLAN (CONTINUED) C. Disability and Death Benefits A vested member who is awarded federal Social Security disability or Railroad Retirement disability benefits is eligible to claim IPERS benefits regardless of age. Disability benefits are not reduced for early retirement. If a member dies before retirement, the member's beneficiary will receive a lifetime annuity or a lump-sum payment equal to the present actuarial value of the member's accrued benefit or calculated with a set formula, whichever is greater. When a member dies after retirement, death benefits depend on the benefit option the member selected at retirement. D. Contributions Contribution rates are established by IPERS following the annual actuarial valuation, which applies IPERS' Contribution Rate Funding Policy and Actuarial Amortization Method. State statute limits the amount rates can increase or decrease each year to 1 percentage point. IPERS Contribution Rate Funding Policy requires the actuarial contribution rate be determined using the "entry age normal" actuarial cost method and the actuarial assumptions and methods approved by the IPERS Investment Board. The actuarial contribution rate covers normal cost plus the unfunded actuarial liability payment based on a 30-year amortization period. The payment to amortize the unfunded actuarial liability is determined as a level percentage of payroll, based on the Actuarial Amortization Method adopted by the Investment Board. In fiscal year 2025, pursuant to the required rate, regular members contributed 6.29% of covered payroll and the City contributed 9.44% of covered payroll for a total rate of 15.73%. Protection occupation members contributed 6.21% of covered payroll and the City contributed 9.31% of covered payroll, for a total rate of 15.52% The City's contributions to IPERS for the year ended June 30, 2025, were $162,674. E. Net Pension Liability, Pension Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to Pensions At June 30, 2025, the City reported a liability of $428,295 for its proportionate share of the net pension liability. The net pension liability was measured as of June 30, 2024, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of that date. The City's proportion of the net pension liability was based on the City's share of contributions to IPERS relative to the contributions of all IPERS participating employers. At June 30, 2024, the City's proportion was 0.012713%, which was an increase of 0.001225% from its proportion measured as of June 30, 2023. At June 30, 2024, for the Protection Plan, the City's proportion was 0.032285%, which was an increase of 0.025971% from its proportion measured as of June 30, 2023. For the year ended June 30, 2025, the City's pension expense, deferred outflows of resources and collective deferred inflows of resources totaled $62,177, $222,894, and $4,941, respectively. There were no non-employer contributing entities to IPERS. 25