4.1. ERMUSR 04-09-2019 - Laserfiche WebLink

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Elk River Municipal Utilities Elk River, Minnesota Notes to the Financial Statements December 31, 2018 Note 5: Postemployment Benefits Other Than Pensions A. 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. At December 31, 2018, the following employee were covered by the benefit terms. Active Plan Members 38 Active Waiving Coverage 5 Total Plan Members 43 B. Funding Policy Contribution requirements are also 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 2018, the Utility contributed $0 to the plan. Plan members receiving benefits contribute 100 percent of their premium costs. In fiscal year 2018, total member contributions were$0. C. Actuarial Methods and Assumptions The Utilities total OPEB liability of$100,572 was measured as of December 31, 2018, and the total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation as of January 1, 2017. The total OPEB liability in the January 1, 2018 actuarial valuation was determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Discount Rate 3.31% Expected Long-Term Investment Return N/A 20-Year Municpal Bond Yield 3.31% Inflation Rate 2.75% Salary Increases 3.25% Medical Trend Rate 6.9% in 2018 grading to 5.2%over 3 years until 2055 grading down to 4.4% ultimate rate in 2074 The discount rate used to measure the total OPEB liability was 3.31 percent. Mortality rates were based on the RP-2014 mortality tables with projected mortality improvements based on scale MP- 2016, and other adjustments. The actuarial assumptions used in the December 31, 2018 valuation were based on input from a variety of published sources of historical and projected future financial data. Each assumption was reviewed for reasonableness with the source information as well as for consistency with the other economic assumptions. 46 133