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CITY OF EUGENE, OREGON
<br />Notes to Basic Financial Statements
<br />(5) Other Information, continued
<br />(D) Other Post-employment Benefits (OPEB), continued
<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 (ARC), an amount actuarially determined in accordance within the parameters of
<br />GASB 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal
<br />cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed
<br />thirty years. The following table shows the components of the City’s annual OPEB cost for the fiscal year
<br />ending June 30, 2007, the amount actually contributed to the plans, and changes in the City’s net OPEB
<br />obligation:
<br />Annual required contribution$2,805,747
<br />Interest on net OPEB obligation29,000
<br />Adjustment to the annual required contribution(37,730)
<br />Annual OPEB cost (expense)2,797,017
<br />Contributions made914,520
<br />Increase in net OPEB obligation1,882,497
<br />Net OPEB obligation, beginning of year580,000
<br />Net OPEB obligation, end of year$2,462,497
<br />Based on prior actuarial valuations, the City had recorded a $580,000 liability for post-employment life
<br />insurance benefits for disabled employees. Upon implementing GASB 45, this liability has been reported as a
<br />beginning of year net OPEB obligation.
<br />The City’s annual OPEB cost, the contribution, the percentage of annual OPEB cost contributed to the plans,
<br />and the net OPEB obligation for 2007 were as follows:
<br />Percentage of
<br />Fiscal yearAnnualannual OPEBNet OPEB
<br />ending June 30OPEB costContributioncost contributedobligation
<br />2007$2,797,017914,52033%2,462,497
<br />Funded Status and Funding Progress
<br />As of June 30, 2007, the most recent actuarial valuation date, the actuarial accrued liability for benefits was
<br />$22,854,225, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability
<br />(UAAL) of $22,854,225. The covered payroll (annual payroll of active employees covered by the plans) was
<br />$75,075,500, and the ratio of the UAAL to the covered payroll was 30 percent.
<br />For the fiscal year ending June 30, 2007, the City has set aside $889,074 to pay for future post-employment life
<br />insurance benefits for disabled employees, which is included in the unrestricted portion of net assets in the Risk
<br />and Benefits internal service fund. Since these assets have not been placed in a qualified trust (or equivalent
<br />arrangement) they have not been recognized as part of the actuarial valuation.
<br />continued
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