5.1. ERMUSR 04-14-2015 - Laserfiche WebLink

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ELK RIVER MUNICIPAL UTILITIES ELK RIVER,MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2014 Note 5: POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS Plan Description. Elk River Municipal Utilities(the Utilities)administers a multi-employer defined benefit healthcare plan ("the Retiree Health Plan").The plan provides lifetime healthcare insurance for eligible retirees and their spouses through the Utilities group health insurance plan,which covers both active and retired members.Benefit provisions are reviewed intermittently through the relationship with the Utilities' insurance broker.The Retiree Health Plan does not issue a publicly available financial report. Funding Policy. Contribution requirements also are reviewed at the time changes are made to the plan.The Utility contributes none of the cost of current-year premiums for eligible retired plan members and their spouses.For fiscal year 2014,the Utility contributed$0 to the plan.Plan members receiving benefits contribute 100 percent of their premium costs. In fiscal year 2014,total member contributions were$0. Annual OPEB Cost and Net OPEB Obligation. The Utilities' annual other postemployment benefit(OPEB)cost(expense)is calculated based on the annual required contribution of the employer(ARC).The Utility has elected to calculate the ARC and related information using the alternative measurement method permitted by GASB Statement 45 for employers in plans with fewer than one hundred total plan members.The ARC represents a level of funding that,if paid on an ongoing basis,is projected to cover normal cost each year and to amortize any unfunded actuarial liabilities(or funding excess)over a period not to exceed thirty years.The following table shows the components of the Utilities annual OPEB cost for the year,the amount actually contributed to the plan,and changes in the Utilities' net OPEB obligation to the Retiree Health Plan: Annual required contribution $ 10,693 Interest on net OPEB obligation 1,802 Adjustment to annual required contribution (2,605) Annual OPEB Cost(expense) 9,890 Contributions made Direct(explicit)subsidy - Implicit subsidy - Increase in net OPEB obligation 9,890 Net OPEB obligation-beginning of year 45,042 Net OPEB obligation-end of year $ 54,932 The Utilities'annual OPEB cost,the amount and percentage of annual OPEB cost contributed to the plan,and the net OPEB obligation for December 31,2014 and the preceding two fiscal years was as follows: Three Year Trend Information Percentage Year Annual Employer Annual OPEB Net OPEB Ending OPEB Cost Contribution Contributed Obligation 12/31/2014 $ 9,890 $ - - % $ 54,932 12/31/2013 6,073 1,391 23 45,042 12/31/2012 4,601 - - 40,360 Funded Status and Funding Progress. As of December 31,2014,the actuarial accrued liability for benefits was$68,948,all of which was unfunded.The covered payroll(annual payroll of active employees covered by the plan)was$2,810,413 and the ratio of the unfunded actuarial accrued liability to the covered payroll was 2.50 percent. 94