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City of Redwood City 6.1.E. - Page 94
<br /> Notes to the Basic Financial Statements
<br /> For the year ended June 30, 2015
<br /> NOTE 9—EMPLOYEE BENEFITS(CONTINUED)
<br /> The following table shows the components of the City's annual OPEB costs for the year, the amount
<br /> actually contributed to the plan, and changes in the City's net OPEB obligation.
<br /> Annual Required Contribution 4,958,000
<br /> Interest on net OPEB obligation 536,000
<br /> Adjustment to annual required contribution (457,000)
<br /> Annual OPEB Cost 5,037,000
<br /> Contributions made to irrevocable trust (2,458,221)
<br /> Benefit payments made outside of trust (2,578,779)
<br /> Increase in net OPEB obligation
<br /> Net OPEB obligation-beginning of the year 6,962,477
<br /> Net OPEB obligation-end of the year 6,962,477
<br /> The General fund, the Capital Outlay fund, and other non-major funds have been used to finance the
<br /> net OPEB obligation.
<br /> The City annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net
<br /> OPEB obligation for the fiscal year ended June 30, 2015 and the two preceding years were as follows:
<br /> Year Annual Annual OPEB OPEB
<br /> Ended OPEB Cost Cost Contributed Obligation (Asset)
<br /> $ % $
<br /> 6/30/2013 5,172,000 98 6,962,477
<br /> 6/30/2014 4,890,000 100 6,962,477
<br /> 6/30/2015 5,037,000 100 6,962,477
<br /> As of June 30, 2015, the most recent actuarial valuation date, the plan was 25.9%funded. The actuarial
<br /> accrued liability (AAL) for benefits was $70,852,000, and the actuarial value of plan assets was
<br /> $18,382,000, resulting in an unfunded actuarial accrued liability (UAAL) of $52,470,000. The covered
<br /> payroll (annual payroll of active employees covered by the plan) was $51,466,341 and the ratio of UAAL
<br /> to the covered payroll was 101.9%.
<br /> Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and
<br /> assumptions about the probability of occurrence of events far into the future. Examples include
<br /> assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined
<br /> regarding the funded status of the plan and the annual required contributions of the employer are
<br /> subject to continual revision as actual results are compared with past expectations and new estimates
<br /> are made about the future. The Schedule of Funding Progress, presented as Required Supplementary
<br /> Information following the notes to the financial statements, presents multiyear trend information
<br /> about whether the actuarial value of plan assets is increasing or decreasing over time relative to the
<br /> actuarial accrued liabilities for benefits.
<br /> Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
<br /> understood by the employer and the plan members) and include the types of benefits provided at the
<br /> time of each valuation and the historical pattern of sharing of benefit costs between the employer and
<br /> plan members to that point.The actuarial methods and assumptions used include techniques that are
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