5.3. ERMUSR 04-12-2016 - Laserfiche WebLink

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ELK RIVER MUNICIPAL UTILITIES ELK RIVER,MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2015 Note 5: POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS-CONTINUED Annual required contribution $ 11,240 Interest on net OPEB obligation 2,197 Adjustment to annual required contribution (3,177) Annual OPEB Cost(expense) 10,260 Contributions made Direct(explicit)subsidy - Implicit subsidy (2,151) Increase in net OPEB obligation 8,109 Net OPEB obligation-beginning of year 54,932 Net OPEB obligation-end of year $ 63,041 The Utilities' annual OPEB cost,the amount and percentage of annual OPEB cost contributed to the plan,and the net OPEB obligation for December 31,2015 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 12/31/2015 $ 10,260 $ 2,151 21 % 63,041 12/31/2014 9,890 - - 54,932 12/31/2013 6,073 1,391 23 45,042 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. The projection of future benefit payments for an ongoing plan involves estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment,mortality,and the healthcare cost trend.Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.The schedule of funding progress,presented as required supplementary information following the notes to the financial statements,presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Methods and Assumptions. Projections of benefits for financial reporting purposes are based on the substantive plan(the plan as understood by the employer and plan members)and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point.The methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets,consistent with the long-term perspective of the calculations. 143