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IV-38CITY OF ELK RIVER NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 12 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS A. Plan Description The City provides other postemployment health insurance benefits for retired employees through two defined benefit plans: Municipal Retirees Health Plan (MRHP), a single-employer plan, and Utilities Retirees Health Plan (URHP), a multiemployer plan. Each plan provides benefits for eligible retirees and their dependents through the City's group health insurance plans, which cover both active and retired members. Since the premium is a blended rate determined on the active and retiree population, the retirees are receiving an implicit rate subsidy. The MRHP and the URHP do not issue publicly available financial reports. At December 31, 2019, the following employees were covered by the benefit terms: Active Plan Members Active Plan Members Waiving Coverage Inactive Members or Beneficiaries Receiving Benefits Inactive Members Waiving Benefits Total Plan Members B. Funding Policy Municipal Retiree HealU, Plan 124 29 11 164 Utility Retiree HealUi Plan 39 9 48 Contribution requirements are reviewed at the time changes are made to the plans. Benefit provisions for MRHP are established and amended by the City. The Utilities has been delegated authority to establish and amend benefit provisions for URHP. Eligible retirees receiving benefits are required to pay 100% of the total premium. CITY OF ELK RIVER NOTES TO BASIC FINANCIAL STATEMENTS DECEMBER 31, 2019 NOTE 12 POST EMPLOYMENT BENEFITS OTHER THAN PENSIONS (CONTINUED) C. Total OPEB Liabillty The City's (MRHP) total OPEB liability was measured as of January 1, 2019, and the Utilities total OPEB liability was measured as of December 31, 2019. The total OPEB liability in the January 1, 2019 actuarial valuations of the City and the Utilities were determined using the following actuarial assumptions, applied to all periods included in the measurement, unless otherwise specified: Valuation Dale: Measurement Date· Method• and Assumptions Used to Detarmina the Contibytion Batas· Actuarial Cost Method Amortization Method Amortization Period Inflation Healthcare cost trend rate Salary increases Discount rate Mortality C!\l QI Elk River January 1, 2019 January 1, 2019 Entry Age Level Pen:entage of Payroll, Closed Average of expected remaining service on a cloaed basis for diflerances between expected and actual experience and assumption changes. 2.50% 6.50% as of January 1, 2019 grading to 5.00% over 6 years. 3.00% 3.60% RP-2014 White Collar Mortality Tables with MP-2018 Generational Improvement Scale (with Blue Collar edjustment for Police and Fire Personnel) Elk River Mi.mi_~!l!!!.!:!!ilttles January 1, 2019 Oecember 31, 2019 Entry Age Level Percentage of Payroll, Clceed Average of expected remaining service on a dosed basis for dlfferencea between expected and actual experience and assumption changes. 2.50% 6.40% for 2019, grading to 4.00% in 2076 and later years • Salary scale updated to the ral9s used In the July 1, 2018 PERA of Minnesota Retirement Plan actuarial valuation to reflect recently-published tables. 3.71% RP-2014 Mortality Tablea wtth projected mortality improvements be!l8d on scale MP-2017, and olher adjustments. The discount rates used to measure the total OPEB liability of the City and Utilities were 3.80% and 3. 71 %, respectively. The actuarial assumption used in the January 1, 2019 valuations 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. No assets were placed in a trust for the payment of OPEB. 186