Post-Employment Benefits – From Valuation to Reporting

1. Post-Employment Benefits – From Valuation to Reporting WASBO Accounting ConferenceMarch 2019

2. Today’s Presentation

3. Define the Benefits Pensions(Stipends) Cash or cash equivalents incl. post employment TSA contributions OPEB: Health, Dental, Vision, Life, Implicit Rate Subsidy Continued insurance coverages or HRA contributions available for premium reimbursement or other expenses CompensatedAbsences Sick Leave, vacation pay, etc.

4. Determine Obligations • Actuarial Valuation • OPEB Valuation • Supplemental Pension Valuation • Compensated Absences Liabilities

5. Measurement Date The Measurement Date • Same as Valuation Date (Roll back): • 12 months prior to reporting date • Same as Reporting Date (Roll Forward): • Same as financial reporting date

6. Valuation date 6/30/18 or 7/1/18 6/30/17 or 7/1/17 Reporting Date 6/30/2019 Service Cost Service Cost Measurement Date 6/30/20186/30/19

7. Define the Funding • Pay-As-You-Go from General Assets • Funding via OPEB/Pension Trust in retirement • Funding via OPEB/Pension Trust by individual each year as earned.

8. Example of Post Employment Benefit Trust Retirement Funded Other Prem Only HRA Medical& Dental Sick Leave Stipend/ Cash 403(b) OPEB Supp Pension ActivelyFully-Funded 403(b) Match 403(b) TSA HRA Carryover Post Emp HRA Med Plan HRA Actively Funded means the amount earned each year is funded each year via a Trust

9. Funding Post-Employment Benefits • Investment policy • Should address at minimum, the purpose of the investments (for funding OPEB, Pension, etc.), the types of investments acceptable and the expected rate at which these investments will fund the benefit.

10. How to use this information to report to DPI • Implicit Rate Subsidy • Trust Funding and Assets • Financial Statements • Why does DPI collect?

11. How to use this information to report to DPI • Implicit Rate Subsidy • Actual Trust Health/Long Term Care Expenditures * (Cost Value Factor – 1) = Implicit Rate Subsidy • Used to reduce Object 241 expenditures due to Retirees being on the districts health plan What to use for 2017-18

12. Complete DPI spreadsheet – NOT REQUIRED • Annual report Due September 20 • This is just a matter of recording activity for the year from the trust • Contribution into the trust • Disbursements for benefits • Implicit Rate Subsidy • Financial Statements Due December 2 • Values from Actuarial study (Net Liability amount and items for notes to financial statements)

13. Reporting Timetables • Annual report Due September 20 • Financial Statements Due December 2 • Planning dates • Schedule a study if needed (start RFP planning Dec/Jan prior to FY end) • Schedule the study • Provide all required data needed for study • After all data is provided, studies generally take 10+ weeks

14. From financial reporting statement From Trust Statement or whatever was paid should include IRS

15. Need information broken out By benefit type

16. Reconciliation

18. Table for RSI

19. Contribution to Trust After measurement date Or PAYG + Implicit rate subsidy

21. Table for RSI

23. Step 1: Actual Total Retiree Premium X Cost-Value Factor = Value Step 2: Value - Actual Total Retiree Premium = Implicit Rate Subsidy Step 3: Total District Paid Benefit + Implicit Rate Subsidy = District Contribution

24. Self-Insured District Contribution (Claims Paid + Plan Administration + Stop-Loss Premium) • Minus (Retiree Contributions + Retiree Stop-Loss Reimbursements) • Equals District Contributions Compare District Contributions to Trust Contributions If no Trust, District Contributions are noted on Table V If Trust exists, Trust Contributions are noted on Table V