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City of Redwood City <br />Notes to the Basic Financial Statements (Continued) <br />For the Year Ended June 30, 2025 <br /> <br /> <br />117 <br />Note 13 – Other Postemployment Benefits (Continued) <br /> <br />C. Port Plan (Continued) <br /> <br />Employees Covered <br /> <br />As of the June 30, 2023 actuarial valuation, the following current and former employees were covered by the benefit <br />terms: <br />Active employees 3 <br />Inactive employees or beneficiaries currently receiving benefits 5 <br />Inactive employees entitled to but not receiving benefits - <br />Total 8 <br /> <br />The Port’s net OPEB liability at June 30, 2025, was measured as of June 30, 2023 and the total OPEB liability used <br />to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2024. <br /> <br />Actuarial Assumptions <br /> <br />The total OPEB liability, measured as of June 30, 2024, was determined using the following actuarial assumptions: <br /> <br />Actuarial Assumptions: <br />Discount Rate <br />Inflation <br />Aggregate payroll increases <br />Actuarial cost method <br />Expected long-term investment rate of return <br />Mortality, Termination, and Disability <br />Mortality Improvement Scale <br />Healthcare Trend Rate <br />3.97% <br />2.75% <br />3.00% <br />3.97% <br />Based on CalPERS 2021 experience study report using data for the <br />period from 1997 to 2019. <br />Entry Age Normal Cost Method <br />Macleod Watts Scale 2022 applied generationally from 2017. <br />An annual healthcare cost trend rate of 8.0% in 2019 and 2020, 7.0% in <br />2021 through 2030, and 6.0% each year thereafter. <br /> <br />Since the benefits are not funded, the discount rate is equal to the 20-Year Bond Rate. The Port has chosen to use <br />the “Fidelity General Obligation AA Index” as its 20-year bond rate. That Index was 3.86% at June 30, 2023, and <br />3.97% at June 30, 2024 measurement date. <br /> <br />Discount Rate <br /> <br />The discount rate used to measure the total OPEB liability was 3.97 percent. The projection of cash flows used to <br />determine the discount rate assumed that District contributions will be made at rates equal to the actuarially <br />determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected <br />to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. <br />Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected <br />benefit payments to determine the total OPEB liability. <br /> <br />Change of Assumptions <br /> <br />Discount rate was updated based on municipal bond rate as of the measurement date. The medical trend, and <br />PEMHCA minimum trend were updated. <br /> <br />7.C. - Page 149 of 269 <br />168