Laserfiche WebLink
CITY OF ORONO <br />NOTES TO BASIC FINANCIAL STATEMENTS <br />DECEMBER 31, 2015 <br /> <br /> <br />(45) <br /> <br />NOTE 6 OTHER POSTEMPLOYMENT BENEFITS (CONTINUED) <br />C. Annual OPEB Cost and Net OPEB Obligation (Continued) <br />The City’s annual OPEB cost, the percentage of the annual OPEB cost contributed to <br />the plan, and the net OPEB obligation for 2015: <br /> <br /> Percentage <br />Fiscal Annual of Annual Net <br />Year OPEB OPEB Cost OPEB <br />Ended Cost Contributed Obligation <br />12/31/2015 113,521$ 58.2% 300,977$ <br />12/31/2014 68,725 63.7% 253,534 <br />12/31/2013 68,841 44.8% 228,591 <br />D. Funded Status and Funding Progress <br />As of January 1, 2014, the most recent actuarial valuation date, the City’s unfunded <br />actuarial accrued liability (UAAL) was $831,138. The annual payroll for active employees <br />covered by the plan in the actuarial valuation was $3,445,420 for a ratio of UAAL to <br />covered payroll of 24.1%. <br /> <br />Actuarial valuations of an ongoing plan involve estimates of the value of reported <br />amounts and assumptions about the probability of occurrence of events far into the <br />future. Examples include assumptions about future employment, mortality, and <br />healthcare cost trends. Amounts determined regarding the funded status of the plan and <br />the annual required contributions of the employer are subject to continual revision as <br />actual results are compared with past expectations and new estimates are made about <br />the future. The schedule of funding progress, presented as required supplementary <br />information following the notes to the financial statements, presents multiyear trend <br />information about whether the actuarial value of plan assets is increasing or decreasing <br />over time relative to the actuarial accrued liabilities for benefits. <br /> <br />E. Actuarial Methods and Assumptions <br />Projections of benefits for financial reporting purposes are based on the substantive plan <br />(the plan as understood by the employer and plan members) and include the types of <br />benefits provided at the time of each valuation and the historical pattern of sharing of <br />benefit costs between the employer and plan members to that point. The actuarial <br />methods and assumptions used include techniques that are designed to reduce the <br />effects of short-term volatility in actuarial accrued liabilities and the actuarial value of <br />assets, consistent with the long-term perspective of the calculations.