Other Postemployment Benefits Financial Accounting Webcast

1. Other Postemployment BenefitsFinancial Accounting Webcast Kathy Guralski, Auditor, School Finance Team Lori Ames, Consultant, School Finance Team June 28, 2006

2. Audio Difficulties? Make sure the volume on Media Site live is turned up (volume button located beneath the speaker’s picture) Make sure the volume on your computer is turned up (volume icon located on the right hand side of your computer task bar) Contact your IT department

3. Agenda Intro & Media Site Technical Issues Trust Contribution Amount Financial Accounting Annual Meeting Reporting Requirements Questions & Answers Polls

4. Presentation Assumptions This presentation is focused on the financial accounting requirements as it relates to a trust. Given those parameters, we make the following assumptions: The actuarial study or alternative method has been completed. The Annual Required Contribution is known. The District has already established an Employee Benefit Trust (Fund 73).

5. Presentation Assumptions If you need information relating to the actuarial determination or establishment of a trust, please refer to the following document. “Employee Benefit Fund (Fund 73) Requirements” located at: http://www.dpi.wi.gov/sfs/ben_trust.html

6. Trust Contribution Amount The amount of postemployment benefits to be funded in any given year is dependent on various factors. Size of the district’s liability Requirements for current year payment for post employment benefits Available resources in the district’s budget Amount of the district’s fund balance

7. Potential Contribution Amounts The District may choose to fund: the entire unfunded actuarial accrued liability plus normal cost in a single payment The annual required contribution An amount less than the annual required contribution An amount more than the annual required contribution but not in excess of the actuarial accrued liability plus normal cost

8. Trust Contribution Amount In order for a trust contribution to recorded in the current fiscal year, a physical segregation of assets must occur by June 30th. In other words, the contribution should be made and the cash have cleared the district’s bank account by June 30th.

9. Contribution Amounts and Applicable State Aid General Equalization Aid Any contribution to the trust, not in excess of the unfunded actuarial accrued liability plus normal cost will be included in the calculation of shared cost. Positive tertiary aid districts – may receive additional equalization aid Negative tertiary aid districts – may fall more heavily into negative aid

10. Contribution Amounts and Applicable State Aid Federal and State Grants If the grant allows, a school district may include all costs of funding eligible staff postemployment benefits, up to a maximum of the annual required contribution (ARC), in the calculation of costs subject to federal and state grants.

11. Contribution Amounts and Applicable State Aid State Categorical Aid ( i.e. special education categorical aid) A school district may include all costs of funding eligible staff postemployment benefits, up to a maximum of the annual required contribution (ARC), in the calculation of costs subject to categorical aid.

12. Financial Accounting Concept: District decides to set up a trust District decides on current fiscal year contribution amount Physically makes a contribution to the trust Pay all future retiree benefits from the trust http://www.dpi.wi.gov/sfs/doc/ben_acct.doc Available on the SFS website is this document titled “Financial Transaction Accounting” This document will be my focus Last two are the ones I will concentrate onAvailable on the SFS website is this document titled “Financial Transaction Accounting” This document will be my focus Last two are the ones I will concentrate on

13. Financial Accounting