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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2015 64 Note 19 OTHER POSTEMPLOYMENT BENEFIT PLAN At December 31, 2008, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pensions. The City engaged an actuary to determine the City’s liability for postemployment healthcare benefits other than pensions as of January 1, 2014. A. PLAN DESCRIPTION The City provides benefits for retirees as required by Minnesota Statute §471.61 subdivision 2b. Active employees, who retire from the City when over age 50 and with 20 years of service, may continue coverage with respect to both themselves and their eligible dependent(s) under the City’s health benefits program until age 65. Pursuant to the provisions of the plan, retirees are required to pay the total premium cost. As of December 31, 2015 there were approximately 48 active participants and 6 retired participants receiving benefits from the City’s health plans. B. FUNDING POLICY The City funds its OPEB obligation on a pay as you go basis. For fiscal year 2015, the City contributed $29,984 to the plan. C. ANNUAL OPEB COST AND NET OPEB OBLIGATION The City’s annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities over a period not to exceed thirty years. The following table shows the components of the City’s annual OPEB cost for the year, the amount actually paid from the plan, and changes in the City’s net OPEB obligation. Annual Required Contribution 31,590$ Interest on Net OPEB Obligation 972 Adjustment to Annual Required Contribution (3,749) Annual OPEB Cost (Expense) 28,813 Contributions Made (28,984) Increase in Net OPEB Obligation (171) Net OPEB Obligation - Beginning of Year 91,023 Net OPEB Obligation - End of Year 90,852$ The City’s annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPEB obligation for 2015 and the two preceding years: Percentage Fiscal Annual of Annual Net Year OPEB OPEB Cost OPEB Ended Cost Contributed Obligation 12/31/2013 27,437$ 77.6% 83,969$ 12/31/2014 26,468 73.3% 91,023 12/31/2015 28,814 99.4% 90,852