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CITY OF EUGENE, OREGON
<br />Notes to Basic Financial Statements
<br />(5) Other Information, continued
<br />(E) Other Post-employment Benefits (OPEB), continued
<br /> City Healthcare Plan, continued
<br />The City’s post-employment life insurance benefit for disabled employees is an elective benefit offered by the City,
<br />this benefit is subject to collective bargaining agreements. The amount of life insurance benefits that a disabled
<br />employee receives is based on the amount of coverage and the reduction pattern in effect at the time of disablement.
<br />The coverage amount varies per employer group; the maximum benefit is $250,000.
<br />The City did not establish an irrevocable trust (or equivalent arrangement) to account for either plan. Instead, the
<br />activities of the plans are reported in the City’s Risk and Benefits Internal Service Fund. Neither plan issues a
<br />separate report.
<br />Funding Policy
<br />The City has the authority to establish and amend contribution requirements. The required contribution is based on
<br />projected pay-as-you-go financing requirements. Since the City’s healthcare plan is self-insured, the annual required
<br />contributions can fluctuate. For the fiscal year ending June 30, 2015, the City’s combined plan contributions were
<br />$1,193,449.
<br />Annual OPEB Cost and Net OPEB Obligation
<br />The City’s annual other post-employment benefit cost (expense) is calculated based on the annual required
<br />contribution of the employer, an amount actuarially determined in accordance within the parameters of GASB 45.
<br />The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year
<br />and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The
<br />following table shows the components of the City’s annual OPEB cost for the fiscal year ending June 30, 2015, the
<br />amount actually contributed to the plans, and changes in the City’s net OPEB obligation:
<br />Annual required contribution$1,052,576
<br />Interest on net OPEB obligation127,710
<br />Adjustment to the annual required contribution(186,332)
<br />Annual OPEB cost (expense)993,954
<br />Contributions made1,193,449
<br />Increase (decrease) in net OPEB obligation(199,495)
<br />Net OPEB obligation, beginning of year3,249,619
<br />Net OPEB obligation, end of year$3,050,124
<br />The City’s annual OPEB cost, the contribution, the percentage of annual OPEB cost contributed to the plans, and the
<br />net OPEB obligation for 2015 and the preceding two years were as follows:
<br />Percentage of
<br />Fiscal year Annualannual OPEB Net OPEB
<br />ending June 30 OPEB cost Contributioncost contributed obligation
<br />2013 $ 1,141,556 1,881,421 165% 3,763,305
<br />2014 1,152,315 1,666,001 145% 3,249,619
<br />2015 993,954 1,193,449 120% 3,050,124
<br />continued
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