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Employee Benefit Trust

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Retiree medical plan premium subsidy eliminated

While the Board of Trustees has been pleased to be able to offer a significant premium subsidy to retirees for many years, new reporting requirements have resulted in the Board discontinuing the subsidies effective January 1, 2018.

GASB 43 and GASB 45 reporting

In compliance with reporting requirements under GASB 43, which require that plan sponsors recognize the value of future payments available to current and future retirees, the Trust contracts with Aon-Hewitt to conduct an actuarial valuation of post-employment benefits (other than pension) for the Trust as a cost-sharing multiple employer plan. GASB 43 reports a single actuarial valuation for all plan members, and employers may attach this information to their Annual Financial Report to demonstrate compliance with GASB 45.

GASB 74 and GASB 75 reporting

Effective for fiscal years beginning after June 15, 2016, GASB 74 replaces GASB 43, and for fiscal years beginning after June 15, 2017, GASB 75 replaces GASB 45. In part, these changes require the Trust to meet increased reporting requirements, and individual employers to report their share of the net OPEB liability of Trust subsidized retiree plans in their Financial Statement. The share of net OPEB liability is computed based on the employers “contribution” to the OPEB plan relative to the total contribution of all employers combined. In addition to the employer including this specific amount in their Financial Statement, these figures will need to be audited by a separate firm.

Due to the additional reporting requirements under GASB 74/75, the Board made the decision to eliminate the subsidization of the non-Medicare retiree plans, effective January 1, 2018, thus effectively reducing and eliminating the net OPEB liability.

While employers do not have to implement GASB 75 until 2018, we will be researching how this change impacts the Trust reporting for 2017, and what effect this will have on employer reporting.

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