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Atta 7.A. - Page 76
<br /> an irrevocable trust fund that allows public employers to prefund the future cost of their retiree health
<br /> insurance benefits and other post employment benefits for their covered employees or retirees.
<br /> The CERBT's administrator, Ca1PERS, issues a publicly available financial report consisting of
<br /> financial statements and required supplementary information for CERBT in aggregate. The report may be
<br /> obtained by writing to Ca1PERS, Lincoln Plaza North, 400 Q Street, Sacramento, CA 95811. During FY
<br /> 2011/12, the City contributed $4,918,000, or 100%, of the actuarially required contributions to the retiree
<br /> health plan.
<br /> Total current payroll for all covered employees for the fiscal year ended June 30, 2012 was
<br /> $45,070,905.
<br /> The City's annual other post employment benefit (OPEB) cost (expense) is calculated based on
<br /> the annual required contribution of the employer(ARC),an amount actuarially determined in accordance
<br /> with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an
<br /> ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial
<br /> liabilities(or funding excess)over a period not to exceed thirty years.
<br /> The following table shows the components of the City's annual OPEB costs for the year, the
<br /> amount actually contributed to the plan,and changes in the City's net OPEB obligation.
<br /> Annual Required Contribution $4,918,000
<br /> Interest on net OPEB obligation 515,000
<br /> Adjustment to annual required contribution (415,000)
<br /> Annual OPEB Cost 5,018,000
<br /> Contributions made to irrevocable trust (2,926,827)
<br /> Benefit payments made outside of trust (1,991,173)
<br /> Increase in net OPEB obligation 100,000
<br /> Net OPEB obligation - beginning of the year 6,768,477
<br /> Net OPEB obligation - end of the year $6,868,477
<br /> The General Fund, the Capital Outlay fund, and other non-major funds have been used to
<br /> finance the net OPEB obligation.
<br /> The City annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the
<br /> net OPEB obligation for the fiscal year ended June 30,2012 and the two preceding years were as follows:
<br /> Annual OPEB
<br /> Annual OPEB Cost Obligation
<br /> Year Ended OPEB Cost Contributed (Asset)
<br /> $ % $
<br /> 6/30/2010 3,830,000 100 6,674,477
<br /> 6/30/2011 3,944,000 98 6,768,477
<br /> 6/30/2012 5,018,000 98 6,868,477
<br /> As of June 30, 2011, the most recent actuarial valuation date, the plan was 8.3% funded. The
<br /> actuarial accrued liability (AAL) for benefits was $53,083,000, and the actuarial value of plan assets was
<br /> $4,429,000, resulting in an unfunded actuarial accrued liability (UAAL) of $48,654,000. The covered
<br /> payroll (annual payroll of active employees covered by the plan)was$44,961,408 and the ratio of UAAL
<br /> to the covered payroll was 108.2%.
<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 subject
<br /> to continual revision as actual results are compared with past expectations and new estimates are made
<br /> about the future. The Schedule of Funding Progress, presented as Required Supplementary Information
<br /> following the notes to the financial statements, presents multiyear trend information about whether the
<br /> Appendix A
<br /> Page 5
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