General financial objective of plan

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  1. (a) The general financial objective of each plan shall be to establish and receive contributions, expressed as percentages of active employee payroll or, in the case of volunteer fire department pension plans, expressed in dollar amounts, which will remain approximately level from year to year and which will not have to be increased for future generations of citizens.

  2. (b) More specifically, contributions received each year shall be sufficient both:

    1. (1) To fully cover the costs of benefit commitments being made to employees for their service being rendered in each year; and

    2. (2) To make a level payment which, if paid annually over a reasonable period of future years, will fully cover the unfunded costs of benefit commitments for service previously rendered.


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