This document discusses strategies for addressing other post-employment benefits (OPEB) obligations. It outlines what various OPEB-related numbers mean, the steps that need to be taken to track OPEB obligations over time, and actions that can be considered to control OPEB costs such as tweaking benefits, funding plans, issuing bonds, and establishing defined contribution accounts. The document provides examples of how some municipalities have implemented cost control measures involving prescription drug plans, pre-funding, defined contribution accounts for new hires, and a combination of strategies.
1. We have the OPEB numbers, now what? MASBO Annual Conference April 30, 2009
2.
3. What do all these numbers mean? Fund deduction Balance sheet liability, starts at $0 Net OPEB Obligation Cash contribution Expense to recognize Annual OPEB Cost Balance sheet liability Footnote, expense component Unfunded Accrued Liability (UAL) Mandatory funding Component of expense Annual Required Contribution (ARC) What It’s NOT What It IS Term
4. What do we have to do with these numbers? Step 1 - building blocks from the actuarial report:
5. What do we have to do with these numbers? (continued) Step 2 – track the Net OPEB Obligation (NOO):
6. What happens in the second and third years? Step 3 – roll the NOO forward another year:
7.
8.
9.
10.
11.
12.
13.
14.
15. Questions?? James A. Van Iwaarden, FSA Sandra L. Bruns, FSA Brenda K. Hardy, ASA Peter J. Cullen, EA Mark W. Schulte, FSA Mark D. Meyer, FSA www.vaniwaarden.com 888.596.5960 toll free, 612.596.5960 TC
![Topics ,[object Object],[object Object],[object Object],[object Object]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)