12-07-2020 Council Packet - Laserfiche WebLink

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City of Orono, Minnesota Required Supplementary Information (Continued) For the Year Ended December 31, 2019 Schedule of Changes in the City’s Total OPEB Liability and Related Ratios 2019 2018 Total OPEB Liability Service cost 90,925$ 82,950$ Interest 31,294 30,294 Changes in assumptions (49,156) 23,193 Benefit payments (36,813)(35,472) Net Change in Total OPEB Liability 36,250 100,965 Total OPEB Liability - Beginning 837,187 736,222 Total OPEB Liability - Ending 873,437$ 837,187$ Covered Payroll 4,000,000$ 3,900,000$ City's total OPEB liability as a percentage of covered payroll 21.84 % 21.47 Changes in Assumptions: In 2019, the following assumptions changes: The discount rate used in the 20-year municipal bond index, as the plan is not funded. This assumed rate increased from 4.00% to 4.09% The actuarial cost method was updated along with the implementation of GASB Statement No. 74 to the Entry Age Normal Level Percent of Pay method, with investment gains/losses being amortized over 5 years, liability gains/losses are amortized over the average working lifetime, and plan changes are recognized immediately. Previously, under GASB Statement No. 45, the Entry Age Normal actuarial cost method was used, and the unfunded actuarial accrued liability was being amortized as a level percent of payroll over a 30-year period. Note: Schedule is intended to show 10-year trend. Additional years will be reported as they become available. Changes in Assumptions:Changes in Assumptions: In 2019, the following assumptions changes:In 2019, the following assumptions changes: The discount rate used in the 20-year municipal bond index, as the plan is not funded. This assumed The discount rate used in the 20-year municipal bond index, as the plan is not funded. This assumed rate increased from 4.00% to 4.09%rate increased from 4.00% to 4.09% The actuarial cost method was updated along with the implementation of GASB Statement No. 74 toThe actuarial cost method was updated along with the implementation of GASB Statement No. 74 to the Entry Age Normal Level Percent of Pay method, with investment gains/losses being amortized the Entry Age Normal Level Percent of Pay method, with investment gains/losses being amortized over 5 years, liability gains/losses are amortized over the average working lifetime, and plan changes over 5 years, liability gains/losses are amortized over the average working lifetime, and plan changes are recognized immediately. Previously, under GASB Statement No. 45, the Entry Age Normal are recognized immediately. Previously, under GASB Statement No. 45, the Entry Age Normal actuarial cost method was used, and the unfunded actuarial accrued liability was being amortized actuarial cost method was used, and the unfunded actuarial accrued liability was being amortized 93