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City of San Leandro <br />Notes to Basic Financial Statements <br />For the year ended June 30, 2012 <br /> <br /> <br />86 <br /> <br />NOTE 15 –OTHER POST EMPLOYMENT BENEFITS <br /> <br />The City implemented the provisions of GASB 45. Accounting and Financial Reporting by Employers for <br />Postemployment Benefits Other Than Pensions, in fiscal year 2008-09. This Statement establishes uniform financial <br />reporting standards for employers providing postemployment benefits other than pension. The provisions of this <br />Statement are applied prospectively and do not affect prior financial statements. Required disclosures are presented <br />below. <br /> <br />A. Plan Description <br /> <br />The City’s defined benefit Other Post Employment Benefit (OPEB) Plan, which was established by City Council in <br />fiscal year 2009-10 in accordance with GASB Statement No. 45, provides reimbursements to retirees for qualified <br />expenses. Retirees who have at least ten years of se rvice and meet certain criteria based upon retirement date, <br />household income in the most recent calendar year and age are entitled to reimbursements for qualified expenses. <br /> <br />Annual maximum reimbursement amounts differ depending on when an employee retired from City service. The <br />majority of retirees may be eligible for a maximum of $4,320 in annual reimbursements. Amendments to benefit <br />provisions are negotiated by various bargaining units at the City and must be approved by Council. In fiscal year <br />2008-09, the City established an irrevocable exclusive agent multi-employer benefit trust which is administered by <br />Public Agency Retirement Services (PARS). The trust will be used to accumulate and invest assets necessary to <br />reimburse retirees. Separate financial reports are issued by PARS for the OPEB plan. The report can be obtained by <br />writing to PARS at 5141 California Avenue, Suite 150, Irvine, CA. 92617-069, or by calling 800-540-6369. <br /> <br />B. Funding Policy <br /> <br />Annual required contributions (ARC) are based upon actuarial valuations. The contribution requirements of the ARC <br />are established and may be amended by the City Council. Plan members do not make contributions to the plan; the <br />plan is funded entirely by the employer contributions. <br /> <br />The City’s annual OPEB cost is calculated based upon the ARC, an amount actuarially determined in accordance with <br />the parameters of GASB Statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is <br />projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) over a <br />period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost for the <br />year, the amount actually contributed to the plan, and changes in the City’s net OPEB obligation: <br /> <br /> <br />Annual required contribution 1,443,000$ <br />Interest on net OPEB obligation 71,000 <br />Adjustment to the annual required contribution (62,000) <br />Annual OPEB cost 1,452,000 <br />Less: Contributions made (1,169,503) <br />Increase in net OPEB obligation 282,497 <br />NET OPEB obligation - beginning year 1,356,528 <br />NET OPEB obligation - end of year 1,639,025$ <br /> <br />Based upon the valuation dated June 30, 2009, the most recent valuation available, the actuarially required ARC was <br />$1,443,000, and the City contributed $1,169,503 in current fiscal year.