Other Postemployment Benefits (OPEB)
The City implemented GASB Statement No. 45, Accountinq and Financial Reoortinq bv Emolovers for Postemplvolment Benefits other Than Pensions during the year ended June 30, 2009.
Plan Description - The City operates a single-employer health benefit plan, which provides self- insured medical/prescription drug benefits for all full{ime active and retired employees and their eligible dependents. Eligible retirees receive health care coverage through the same plan that is available to active employees. To be eligible for these benefits, participants must be receiving a pension benefit from the lowa Public Employee Retirement System (IPERS), receiving a Social Security Disability Benefit, or retired under Code Chapter 411 of the lowa Code. There were twenty retirees participating in the plan as of June 30th. Retirees pay the same premium for the health benefit plan as active employees, which results in an implicit subsidy and an OPEB liability. The Plan does not issue a stand-alone financial report.
Fundinq Policv - The contribution requirements of plan members are established and may be amended by the City. The City currently finances the benefit plan on a pay-as-you-go basis. The majority of expenditures are paid for out of the General Fund.
Annual OPEB Cost and Net OPEB Oblioation - The City's annual OPEB cost ís calculated based on the annual require contribution (ARC) of the City, an amount actuarially determined in accordance with
GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities over a period not to exceed 30 years.
The following table shows the components of the City's annual OPEB cost for the year ended June 30,2013, the amount actually contributed to the plan and changes in the City's net OPEB obligation:
Annual required contribution lnterest on net OPEB obligation Adjustment to annual required contribution Annual OPEB Cost Net contributions - retirees lncrease in net OPEB obligation Net OPEB obligation beginning of year Net OPEB obligation end of year
$ 47,124 14,945 (13,239)
48,830 18.980 67,810 275.329 $343,139
For calculation of the net OPEB obligation, the actuary has set the transition day as July 1, 2011 . The end of year net OPEB obligation was calculated by the actuary as the cumulative difference between the actuarially determined funding requirements and the actual contributions for the year ended June 30,2013.
For the year ended June 30, 2013, the City paid $93,141 for retiree health claims. Plan members eligible for benefits contributed $112,121 or 100% of the premium costs. The net resulted in a $18,980 contribution for retirees
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