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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, continued
<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 2011 and the preceding two years were as follows:
<br />Percentage of
<br />Fiscal yearAnnualannual OPEBNet OPEB
<br />OPEB costContributioncost contributedobligation
<br />ending June 30
<br />20091,429,3191,343,78594%4,178,547
<br />20101,501,6731,567,333104%4,112,887
<br />2011935,860851,49291%4,197,255
<br />Funded Status and Funding Progress
<br />As of June 30, 2011, the most recent actuarial valuation date, the actuarial accrued liability (AAL) for benefits
<br />was $9,502,642, and the actuarial value of assets was $0, resulting in an unfunded actuarial accrued liability of
<br />$9,502,642. The covered payroll (annual payroll of active employees covered by the plans) was $91,224,907,
<br />and the ratio of the UAAL to the covered payroll was 10%.
<br />As of June 30, 2011, the City has set aside $3,667,887 to pay for future post-employment benefits, which is
<br />included in the unrestricted portion of net assets in the Risk and Benefits Internal Service Fund. Since these
<br />assets have not been placed in a qualified trust (or equivalent arrangement) they have not been recognized as
<br />part of the actuarial valuation.
<br />Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions
<br />about the probability of occurrence of events into the future. Examples include assumptions about future
<br />employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the
<br />plan and the annual required contributions of the employer are subject to continual revision as actual results
<br />are compared with past expectations and new estimates are made about the future. The schedule of funding
<br />progress, presented as required supplementary information, following the notes to the basic financial
<br />statements, presents multiyear trend information about whether the actuarial value of plan assets is increasing
<br />or decreasing over time, relative to the actuarial accrued liabilities for benefits.
<br />Actuarial Methods and Assumptions
<br />Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as
<br />understood by the employer and the plan members) and include the types of benefits provided at the time of
<br />each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to
<br />that point. The actuarial methods and assumptions used include techniques that are designed to reduce the
<br />effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the
<br />long-term perspective of the calculations.
<br />continued
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