Agenda Packet 12-10-18 Meeting - REVISED

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CITY OF EUGENE, OREGON Notes to Basic Financial Statements continued (5) Other Information, continued (E) Other Post-Employment Benefits (OPEB) – Retirement Health Insurance Account (RHIA), continued Plan Benefits The RHIA was established by ORS 238.420 and authorizes a payment up to $60 from the RHIA toward the monthly costs of health insurance for eligible OPERS members. The plan was closed to new entrants hired on or after August 29, 2003. To be eligible to receive this monthly payment toward the premium cost the member must: (1) have eight years or more of qualifying service in OPERS at the time of retirement or receive a disability allowance as if the member had eight years or more of creditable service in OPERS, (2) receive both Medicare Parts A and B coverage, and (3) enroll in a OPERS-sponsored health plan. A surviving spouse or dependent of a deceased OPERS retiree who was eligible to receive the subsidy is eligible to receive the subsidy if he or she (1) is receiving a retirement benefit or allowance from OPERS or (2) was insured at the time the member died and member retired before May 1, 1991. Contributions Employer contribution rates during the period were based on the December 31, 2015 actuarial valuation which became effective July 1, 2017. The rates in effect for the fiscal year ended June 30, 2018 were 0.07% of OPERS- covered salaries for Tier One and Tier Two members to fund the normal cost portion of RHIA benefits. OPERS employers contributed 0.45% percent of all PERS-covered salaries to amortize the unfunded actuarial accrued liability over a fixed period with new unfunded actuarial accrued liabilities being amortized over 20 years. Employer contributions for the year ended June 30, 2018 were $494,750. Employer contributions are advance-funded on an actuarially determined basis. There is no inflation assumption for RHIA postemployment benefits because the payment amount is set by statute and is not adjusted for increases in healthcare costs. As of June 30, 2017, the inactive RHIA plan participants currently receiving benefits totaled 44,769, and there were 61,208 active and 16,369 inactive members who meet the requirements to receive RHIA benefits when they retire OPEB Assets, Liabilities, OPEB Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources Related to OPEB At June 30, 2018, the City reported $422,740 for its proportionate share of the net OPEB asset (liability). The net OPEB asset (liability) was measured as of June 30, 2017, and the total OPEB asset used to calculate the net OPEB asset (liability) was determined by an actuarial valuation as of December 31, 2015 rolled forward to June 30, 2017. The City's proportion of the net OPEB asset (liability) was based on a projection of the City's long-term share of contributions to the OPEB plan relative to the projected contributions of all participating entities, actuarially determined. At June 30, 2017, the City's proportion was 1.01294%, which was a decrease from its proportion measured as of June 30, 2016. For the year ended June 30, 2018, the City recognized OPEB expense (income) of ($505,090). At June 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Deferred outflows of inflows of resources resources Changes in proportion and differences between City contributions and proportionate shares of contributions $0 8,138 Contributions subsequent to the measurement date 494,750 0 Net difference between projected and actual earnings on pension plan investments 0 195,789 $ 494,750 203,927 77 December 10, 2018, Meeting - Item 2D