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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 />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, 2016, 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 obligation119,870
<br />Adjustment to the annual required contribution(174,893)
<br />Annual OPEB cost (expense)997,553
<br />Contributions made1,992,072
<br />Increase (decrease) in net OPEB obligation(994,519)
<br />Net OPEB obligation, beginning of year3,050,124
<br />Net OPEB obligation, end of year$2,055,605
<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 2016 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 />2014 $ 1,152,315 1,666,001 145% 3,249,619
<br />2015 993,954 1,193,449 120% 3,050,124
<br />2016 997,553 1,992,072 200% 2,055,605
<br />Funded Status and Funding Progress
<br />As of June 30, 2015, the most recent actuarial valuation date, the actuarial accrued liability (AAL) for benefits was
<br />$13,181,876, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability of
<br />$13,181,876. The covered payroll (annual payroll of active employees covered by the plans) was $97,086,746, and
<br />the ratio of the UAAL to the covered payroll was 13.6%.
<br />As of June 30, 2016, the City has set aside $3,753,997 to pay for future post-employment benefits, which is included
<br />in the unrestricted portion of net position in the Risk and Benefits Internal Service Fund. Since these assets have not
<br />been placed in a qualified trust (or equivalent arrangement) they have not been recognized as part of the actuarial
<br />valuation.
<br />Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the
<br />probability of occurrence of events into the future. Examples include assumptions about future employment,
<br />mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual
<br />required contributions of the employer are subject to continual revision as actual results are compared with past
<br />expectations and new estimates are made about the future. The schedule of funding progress, presented as required
<br />supplementary information, following the notes to the basic financial statements, presents multiyear trend information
<br />about whether the actuarial value of plan assets is increasing or decreasing over time, relative to the actuarial
<br />accrued liabilities for benefits.
<br />continued
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