Agenda Packet 12-9-19 Meeting - Laserfiche WebLink

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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 Depletion Date Projection, continued The following circumstances justify an alternative evaluation of sufficiency for PERS:  PERS has a formal written policy to calculate an Actuarially Determined Contribution (ADC), which is articulated in the actuarial valuation report.  The ADC is based on a closed, layered amortization period, which means that payment of the full ADC each year will bring the plan to a 100% funded position by the end of the amortization period if future experience follows assumption.  GASB 75 specifies that the projections regarding future solvency assume that plan assets earn the assumed rate return and there are no future changes in the plan provisions or actuarial methods and assumptions, which means that the projections would not reflect any adverse future experience which might impact the plan’s funded position. Based on these circumstances, it is our independent actuary’s opinion that the detailed depletion date projections outlined in GASB 75 would clearly indicate that the Fiduciary Net Position is always projected to be sufficient to cover benefit payments and administrative expenses. Sensitivity of the City's proportionate share of the net OPEB asset (liability) to changes in the discount rate The following presents the City's proportionate share of the net OPEB asset (liability) calculated using the discount rate of 7.2%, as well as what the City's proportionate share of the net OPEB asset (liability) would be if it were calculated using a discount rate that is 1 percentage-point lower (6.2%) or 1 percentage-point higher (8.2%) than the current rate: Current 1% decrease discount rate 1% increase (6.2%) (7.2%) (8.2%) City’s proportionate share of the net OPEB asset (liability) $ 664,105 1,140,586 1,546,166 OPEB plan fiduciary net position Detailed information about the OPEB plan's fiduciary net position is available in the separately issued OPERS financial report Changes in Assumptions and Other inputs Changes in actuarial methods and assumptions implemented since the December 31, 2016 valuation are described in the 2016 Experience Study (Study), published September 2017. Changes in assumptions from that Study are reported in the table of actuarial methods and assumptions on page 71. Modifications to the allocation of actuarial accrued liabilities, administrative expense assumptions, healthcare cost inflation, and mortality tables can be found in the Study at: http://www.oregon.gov/PERS/Pages/Financials/Actuarial- Presentations-and-Reports.aspx. 75 December 9, 2019, Meeting - Item 2CCC Agenda - Page 119