2020 Annual Report

Annual Report 2020 111 TOURISM CHILLIWACK INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Year Ended December 31, 2020 TOURISM CHILLIWACK INC. Notes to Consolidated Financial Statements (continued) Year ended Dece er 31, 2020 9. Employee future benefits: The Company and its employees contribute to the Municipal Pension Plan (a jointly trusteed pension plan). The board of trustees, representing plan members and employers, is responsible for administering the plan, including investment of assets and administration of benefits. The plan is a multi-employer defined benefit pension plan. Basic pension benefits are based on a formula. As at December 31, 2019, the plan has about 213,000 active members and approximately 106,000 retired members. Active members include approximately 41,000 contributors from local governments. Every three years, an actuarial valuation is performed to assess the financial position of the plan and adequacy of plan funding. The actuary determines an appropriate combined employer and member contribution rate to fund the plan. The actuary’s calculated contribution rate is based on the entry-age normal cost method, which produces the long-term rate of member and employer contributions sufficient to provide benefits for average future entrants to the plan. This rate may be adjusted for the amortization of any actuarial funding surplus and will be adjusted for the amortization of any unfunded actuarial liability. The most recent actuarial valuation for the Municipal Pension Plan as at December 31, 2018, indicated a $2,866 million funding surplus for basic pension benefits on a going concern basis. The Company expensed $52,697 (2019 - $48,087 (restated)) for employer contributions to the plan in fiscal 2020. A portion of the 2020, 2019 and prior years contributions are included in accounts payable (note 2). The next valuation will be as at December 31, 2021, with results available in 2022. Employers participating in the plan record their pension expense as the amount of employer contributions made during the fiscal year (defined contribution pension plan accounting). This is because the plan records accrued liabilities and accrued assets for the plan in aggregate, resulting in no consistent and reliable basis for allocating the obligation, assets and cost to individual employers participating in the plan. 10. Contingency: The Company entered into an agreement in 2011 with the City of Chilliwack which took into effect on January 1, 2012. The agreement has been renewed for an additional five years starting January 1, 2017. The agreement outlines the management and operation of Chilliwack Heritage Park. As a condition of the agreement with the City, the Company issued a non-revocable Letter of Credit in the amount of $50,000 as a guarantee for the due and faithful performance of the agreement. 11