© 2024 GovInvest Inc.
OPEB
Update
Alameda, CA
June 4, 2024
1 © 2024 GovInvest Inc.
OPEB
2 © 2024 GovInvest Inc.
Other Post-Employment Benefits (OPEB)
• Includes
• Retiree Health Benefits
• Retiree Dental Benefits
• Retiree Vision Benefits
• Retiree Life Insurance Benefits
• Excludes
• Pensions
• Severance Pay
• The City provides Retiree Health Benefits and Retiree Dental Benefits to former employees
3 © 2024 GovInvest Inc.
Retiree Health Benefits for Safety Members
4 © 2024 GovInvest Inc.
Retiree Dental Benefits for Safety Members
5 Safety Dental Safety Dental
Hire Date On or Before
6/7/2011 On or After 6/8/2011
Eligibility
Retire directly from City
employment with 5 or
more years of City service
Retire directly from City
employment with 10 or
more years of City service
Benefit Full Dental Coverage Full Dental Coverage
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Retiree Health Benefits for Miscellaneous Members
• If retire directly from Alameda, and eligible to retire from CalPERS • PEMHCA minimum
• No retiree dental benefit subsidy
6 © 2024 GovInvest Inc.
OPEB (Pre-2019) – Where Are We Now?
Report Date
June 30, 2023
Measurement Date
June 30, 2023
7 Unfunded
Liability
$43,988,923
Funded
Percentage
10.1%
Benefit Payments
Explicit FY 23-24
$3,026,416
Benefit Payments
Implicit
FY 23-24
$809,608
© 2024 GovInvest Inc.
OPEB (Post-2019) – Where Are We Now?
Report Date
June 30, 2023
Measurement Date
June 30, 2023
8 Unfunded
Liability
$21,484,930
Funded
Percentage
43.2%
Benefit Payments
Explicit FY 23-24
$1,101,915
Benefit Payments
Implicit
FY 23-24
$176,112
© 2024 GovInvest Inc.
Current Funding Projection
9 © 2024 GovInvest Inc.
Current Funding Policy
• City Contributions
• Pays City portion of Retiree Health Care Premiums from General Fund • 115 Trust
• Initial Contribution: $5 million in January 2016
• Additional Contributions of $250,000 each January from 2017 through 2025 • Assets in Trust are not to be used to pay Retiree Health Care Premiums prior to January 1, 2019
10 © 2024 GovInvest Inc.
Current Funding Policy
• Employee Contributions to 115 Trust
• Hired on or before June 7, 2011:
• 2016: 2%
• 2017: 3%
• 2018 & later: 4%
• Hired after June 7, 2011
• 2016: 1%
• 2017 & later: 2%
11 © 2024 GovInvest Inc.
Projecting Unfunded Liability
• Discount Rate
• Pre-2019 increased to 5.55% beginning with 2022 valuation • Post-2019 increased to 6.50% beginning with 2022 valuation 12 © 2024 GovInvest Inc.
Contributions
13 $0
$1
$2
$3
$4
$5
$6
$7
$8
$9
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
Millions
Fiscal Year End
Benefit Payments Employee Contributions City Contributions © 2024 GovInvest Inc.
Projected Unfunded Liability
14 ($10)
$0
$10
$20
$30
$40
$50
$60
$70
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
Millions
As of July 1
Unfunded Liability
© 2024 GovInvest Inc.
Funded Percentage
15 0%
20%
40%
60%
80%
100%
120%
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
As of July 1
Funded Percentage
© 2024 GovInvest Inc.
Questions
16 © 2024 GovInvest Inc.
While tested against actuarial valuation results, the software results will not necessarily match actuarial valuation results, as no two actuarial models are identical. The software offers financially sound projections and analysis; however, outputs do not guarantee compliance with standards under the Government Accounting Standards Board or Generally Accepted Accounting Principles. The software and this presentation are not prepared in accordance with standards as promulgated by the American Academy of Actuaries, nor do outputs or this presentation constitute Statements of Actuarial Opinion. GovInvest has used census data, plan provisions, and actuarial assumptions provided by Customer and/or Customer’s actuary to develop the software for Customer. GovInvest has relied on this information without audit.
Disclaimer
17