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6.A. - Page 107 of 191 <br />CITY OF REDWOOD CITY <br />NOTES TO THE BASIC FINANCIAL STATEMENTS <br />For the Fiscal Year Ended June 30, 2019 <br />NOTE 9 — EMPLOYEE BENEFITS (CONTINUED) <br />B. Post Employment Benefits, Continued <br />Contributions <br />The OPEB Plan and its contribution requirements are established by Memoranda of Understanding with the <br />applicable employee bargaining units and may be amended by agreements between the Authority and the <br />bargaining units. The annual contribution is based on the actuarially determined contribution. For the fiscal <br />year ended June 30, 2019, the Port's cash contributions were $0 in payments to the trust resulting in total <br />payments of $0. <br />Net OPEB Liability <br />The Port's net OPEB liability was measured as of June 30, 2018 and the total OPEB liability used to calculate <br />the net OPEB liability was determined by an actuarial valuation dated June 30, 2018, based on the following <br />actuarial methods and assumptions: <br />Actuarial Assumption <br />Discount Rate Based on the Fidelity General Obligation AA Index <br />Inflation 3.62% as of June 30, 2018 <br />Salary Increases 3.0% including inflation <br />Investment Rate of Return 3.56% <br />Healthcare Trend Rate Medical premiums assumed to increase 8.0% in 2019 and 2020, <br />7.0% in 2021 through 2030, and 6.0% each year thereafter. <br />Mortality Rate Based on the 2014 CaIPERS OPEB Assumptions Model <br />Since the benefits are not funded, the discount rate is equal to the 20 -Year Bond Rate. The Port has chosen to <br />use the "Fidelity General Obligation AA Index" as its 20 -year bond rate. That Index was 3.56% at June 30, <br />2017, and 3.62% at June 30, 2018. <br />79 114 <br />