Comprehensive Annual Financial Report 12/31/2014

Home Search

CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 2014 Note 18 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, 2014 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 2014, the City contributed $19,414 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 $ 29,029 Interest on Net OPEB Obligation 897 Adjustment to Annual Required Contribution (3,458) Annual OPEB Cost (Expense) 26,468 Contributions Made (19,414) Increase in Net OPEB Obligation 7,054 Net OPEB Obligation - Beginning of Year 83,969 Net OPEB Obligation - End of Year $ 91,023 The City's annual OPEB cost, the percentage of the annual OPEB cost contributed to the plan, and the net OPEB obligation for 2014 and the two preceding years: 12/31/2012 12/31/2013 12/31/2014 $ 29,610 27,437 26,468 58 65.2% 77.6% 73.3% $ 77,871 83,969 91,023 Percentage Fiscal Annual of Annual Net Year OPEB OPEB Cost OPEB EndedCost Contributed Obligation 12/31/2012 12/31/2013 12/31/2014 $ 29,610 27,437 26,468 58 65.2% 77.6% 73.3% $ 77,871 83,969 91,023