Laserfiche WebLink
Elk River Municipal Utilities <br />Elk River, Minnesota <br />Notes to the FinancialStatements <br />December 31, 2019 <br />Note:Postemployment BenefitsOtherThan Pensions <br />A.Plan Description <br />Elk River Municipal Utilities (the Utilities) administersamulti-employer definedbenefit healthcare plan (“the Retiree Health <br />Plan”). The plan provideslifetime healthcareinsurance for eligible retireesandtheir spouses through the Utilities group <br />healthinsurance plan,which covers bothactiveand retired members. Benefit provisions are reviewedintermittently <br />through the relationshipwith the Utilities’ insurancebroker.The Retiree HealthPlan does not issuea publiclyavailable <br />financial report. <br />At December 31,2019, thefollowingemployeewere covered by thebenefit terms. <br />Active Plan Members39 <br />Active Waiving Coverage 9 <br />Total Plan Members48 <br />B.Funding Policy <br />Contribution requirements are also reviewed at the time changes are made to the plan. The Utilitiescontributes none of <br />the cost of current-year premiumsfor eligible retired plan members and their spouses. Plan members receiving benefits <br />contribute 100 percent of their premium costs. In fiscal year 2019, total member contributions were $0. <br />C.Actuarial Methods and Assumptions <br />The Utilitiestotal OPEB liability of $217,772was measured as of December 31, 2019, and the total OPEB liability used to <br />calculate the total OPEB liabilitywas determined by an actuarial valuation as of December 31, 2019. <br />The total OPEB liability in the January 1, 2019actuarial valuation was determined using the following actuarial <br />assumptions, applied to all periodsincluded in the measurement, unless otherwise specified: <br />Discount Rate3.71% <br />Expected Long-Term Investment ReturnN/A <br />20-Year Municipal Bond Yield3.71% <br />Inflation Rate2.50% <br />Salary IncreasesMortality, withdrawal and salary scale updated to the <br />rates used in the July 1, 2018 PERA of Minnesota <br />Retirement Plan actuarial valuation to reflect recently- <br />published tables. <br />Medical Trend Rate6.40% for 2019, gradually decreasing over several <br />decades to an ultimate rate of 4.00% in 2076 and later <br />years. <br />Mortality rates were based on the RP-2014mortality tables with projected mortality improvements based on scale MP- <br />2017, and other adjustments.The actuarial assumptions used in the December 31, 2019 valuation were based on input <br />from a variety of published sources of historical and projected future financial data. Each assumption was reviewed for <br />reasonableness with the source information as well as for consistency with the other economic assumptions. <br />47 <br />137 <br />