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<br />address and telephone number are provided for reference and convenience only; the reports are issued by PARS for the OPEB Plan are not incorporated herein by reference.
<br />Funding Policy and Actuarial Assumptions. The City’s annual required contribution (“ARC”) with respect to the OPEB Plan was determined as part of a June 30, 2017 actuarial
<br />valuation, using the entry-age normal cost method. The actuarial assumptions included: (a)
<br />5.5% investment rate of return (net of administrative expenses), (b) inflation rate of 3.0%, (c) projected annual salary increase of 3.00%, and (d) medical plan premium cost will decrease to an ultimate rate of 5% by 2019. The City’s unfunded actuarial accrued liability is amortized on a
<br />level dollar basis over a closed period of 23 years. Actuarial valuations of an ongoing OPEB plan involve estimates of the value of expected
<br />benefit payments and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare
<br />cost trend. Amounts determined regarding the funded status of the OPEB Plan and the annual
<br />required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future.
<br /> Funding Progress and Funded Status. Generally accepted accounting principles permit contributions to be treated as OPEB assets and deducted from the Actuarial Accrued
<br />Liability when such contributions are placed in an irrevocable trust or equivalent arrangement or made by implicate rate subsidies.
<br />The annual OPEB costs and actual contributions for the last four fiscal years are set forth on the following table:
<br />
<br />Fiscal Year Ended Annual OPEB Cost
<br />
<br /> Contribution
<br />Percentage of
<br />Annual OPEB Cost Contributed Net OPEB Obligation
<br />June 30, 2014 $1,471,000 $1,980,000 135% $(509,000)
<br />June 30, 2015 1,378,000 2,575,668 187 (1,197,668)
<br />June 30, 2016 960,480 2,616,649 272 (1,656,169)
<br />June 30, 2017 897,514 7,788,327 868 (6,890,813)
<br />Total Net OPEB Obligation $(8,124,651) Source: City of San Leandro Comprehensive Annual Financial Report for fiscal year ended June 30, 2017.
<br /> As of June 30, 2017, the latest valuation date, the funded status of the OPEB Plan, was as follows:
<br />
<br />Actuarial accrued liability (AAL) $16,181,981
<br />Actuarial value of plan assets $13,665,308
<br />Unfunded actuarial accrued liability (UAAL) $2,516,673
<br />Funded ratio (actuarial value of plan assets/AAL) 84%
<br />Covered payroll (active plan members) $30,080,047
<br />UAAL as percentage of covered payroll 8.40%
<br />Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future.
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