AgdaPkt 2017-01-09 Closed and Joint

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City of Redwood City Notes to the Basic Financial Statements For the fiscal year ended June 30, 2016 NOTE 9 — EMPLOYEE BENEFITS (CONTINUED) 6.1.D. - Page 97 Port of Redwood Citv: The other post -employment benefits (other than pension) offered by the Port are limited to reimbursement of medical premiums only. Eligibility extends to those employees hired before January 1, 2011 who have worked ten or more consecutive years at the Port on a full time basis, and prior to retirement are: (a) enrolled in the Port's medical plan, (b) age 55 or older, and (c) have not been voluntarily or involuntarily terminated from employment at the Port. Spouses and/or dependents are ineligible. The reimbursement of medical premiums is limited to the lesser of: (a) the medical insurance premium paid by the eligible retiree, or (b) the Port's cost to provide medical coverage for an active employee of the same age as the retiree, or (c) the insurance premium for a Medicare supplement plan at the retiree's earliest Medicare eligibility age, whether or not the retiree enrolls in Medicare. The accounting rules governing other post -employment benefits (OPEB) do not require mandatory funding of the actuarial accrued liability or annual required contribution. During the fiscal year ended June 30, 2011, the Port adopted a comprehensive funding policy for post -employment benefits other than pension. The policy addresses the selection of a Section 115 Trust, prefunding strategy, valuation frequency, valuation methodology, disbursements, and administrative matters. The Section 115 Trust selected was the CalPERS California Employer's Retiree Benefit Trust Program (CERBT). For the fiscal year ended June 30, 2016, the Port's annual OPEB cost was $37,624; of this amount $9,106 was expensed and funded by reimbursements to current retirees and the remaining $25,518 net OPEB obligation was expensed and recorded as a liability. Combined with the $202,238 net OPEB obligation as of June 30, 2015, the total net OPEB obligation as of June 30, 2016 was $230,756. The annual required contribution was determined as part of the July 1, 2014 actuarial valuation using the Entry Age Actuarial Cost Method and assumptions consistent with the CalPERS OPEB Assumptions Model. The actuarial assumptions included: (a) salary increases of 3.25% per year, (b) a discount rate of 7.61%, (c) 100% of eligible employees assumed to elect coverage upon retirement and to remain covered for life, (d) retirement, withdrawal, and mortality rates based on CalPERS Assumption model for the classification "public agency miscellaneous 2.7% at 55", and (e) medical premium inflation rates ranging from 9% to 6% over time. The actuarial present value of future benefits was calculated for each individual using the economic assumptions and specific member data, then aggregated. The amortization component of the unfunded actuarial accrued liability was based on a 30 year amortization period. 70