AgdaPkt 2009-12-14 - Laserfiche WebLink

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6.1 B - Attachment No. 4 NOTE 9—EMPLOYEE BENEFITS(CONTINUED� The City's annual other post employment benefit(OPEB)cost(expense)is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the City's annual OPEB costs for the year,the amount actually contributed to the plan, and changes in the City's net OPEB obligation. Annual required contribution $ 5,027,000 Payments made (1,615,915) Increase(decrease)in net OPEB obligation 3,411,085 Net OPEB obligation—beginning of year 3,263,392 Net OPEB obligation—ending of year $ 6.674.477 The City annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the fiscal years ended June 30,2008 and June 30, 2009 were as follows: Year Annual Annual OPEB OPEB Ended OPEB Cost Cost Contributed Obligation(Asset) $ % $ 6/30/08 4,744,124 31 3,263,392 6/30/09 5,027,000 32 6,674,477 As of June 30, 2008, the most recent actuarial valuation date, the plan was 0% funded. The actuarial accrued liability (AAL) for benefits was $55,758,000, and the actuarial value of plan assets was $0, resulting in an unfunded actuarial accrued liability (UAAL)of$55,758,000. The covered payroll(annual payroll of active employees covered by the plan)was $44,799,251 and the ratio of UAAL to the covered payroll was 124%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The Schedule of Funding Progress, presented as Required Supplementary Information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Since this is the second year of including this information in the financial report, the data presented is limited. Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. In the June 30, 2008 actuarial valuation, the actuarial cost method used is Entry Age Normal (EAN) cost method. Under the EAN cost method, the plan's Normal Cost is developed as a level percent of payroll throughout the participants' working lifetime. Entry age is based on current age minus years of service. The Actuarial Accrued Liability (AAL) is the cumulative value on the valuation date of prior Normal Cost. For the retirees,the AAL is the present value of all projected benefits. The Unfunded AAL is 53