6.2. SR 06-19-2017 - Laserfiche WebLink

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CITY OF ELK RIVER NOTES TO BASIC FINANCIAL STATEMENTS YEAR ENDING DECEMBER 31, 2016 NOTE 12 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) C. Annual OPEB Cost and Net OPEB Obligation (Continued) The following table shows the components of the City's annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the City's net OPEB obligation: Municipal Utility Retiree Retiree Health Plan Health Plan Annual Required Contribution $ 125,720 $ 11,682 Interest on Net OPEB Obligation 17,370 2,522 Adjustment to Annual Required Contribution (25,899) (3,645) Annual OPEB Cost(Expense) 117,191 10,559 Contributions Made (56,583) (3,055) Increase in Net OPEB Obligation 60,608 7,504 Net OPEB Obligation - Beginning of Year 434,250 63,041 Net OPEB Obligation - End of Year $ 494,858 $ 70,545 The City's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan and the net OPEB obligation for the last three years are as follows: Percentage Annual of Annual Net OPEB OPEB Cost OPEB Fiscal Year Ended Cost Contributed Obligation MRHP December 31, 2016 $ 117,191 48.3% $ 494,858 December 31, 2015 118,780 41.0% 434,250 December 31, 2014 120,448 33.0% 364,110 URHP December 31, 2016 $ 10,559 28.9% $ 70,545 December 31, 2015 10,260 21.0% 63,041 December 31, 2014 9,890 0.0% 54,932 D. Actuarial 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. For the MRHP, in the January 1, 2014 actuarial valuation, the projected unit credit actuarial cost method was used. The actuarial assumptions included a 4% investment rate of return and an annual healthcare cost trend rate of 7.5% initially, reduced incrementally to an ultimate rate of 5% after 10 years. The actuarial value of assets was not determined as the City has not advance-funded its obligation. The plan's unfunded actuarial accrued liability was amortized as a level dollar amount over a closed basis. (69)