Agenda 11-09-23; 3 - Presentation on Other Post-Employment Benefits (OPEB)

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1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: November 9, 2023 Action Agenda Item No. 3 SUBJECT: Presentation on Other Post-Employment Benefits (OPEB) DEPARTMENT: Finance and Administrative Services ATTACHMENT(S): INFORMATION CONTACT: Attachment 1. Cavanaugh Macdonald, Gary Donaldson, (919) 245-2453 LLC PowerPoint Presentation PURPOSE: To receive a presentation from the County's actuary firm, Cavanaugh Macdonald Consulting, LLC, including a review of the County's Net OPEB Liability and key actuarial assumptions. BACKGROUND: Governmental Accounting Standards Board (GASB) Statements No. 74 and 75 respectively issued in 2016 and 2017 were intended to enhance the reporting of OPEB liability data in state and local governments' financial statements. Other Post-Employment Benefits for the County include retirees' healthcare benefits consisting of medical, prescription and Health Savings Account. GASB 74 and 75 measures the Net OPEB Liability (NOL) as the principal measure of a government's OPEB liability as indicated below: Fiscal 2023 2022 2021 2020 2019 2018 2017 Year Discount 3.65% 3.54% 2.16% 2.21% 3.50% 3.89% 3.57% Rate Net OPEB $120,541,187 $132,374,775 $161,449,960 $137,190,344 $106,718,695 $95,924,108 $96,503,866 Liability The discount rate is benchmarked to the 20-year municipal bond index rate. As indicated above, the discount rate has an inverse relationship with the Net OPEB Liability. FINANCIAL IMPACT: There is no immediate financial impact from receiving this actuary report. The County's Long-Term Financial Planning considers the Other-Post-Employment liability and has appropriately budgeted this amount each fiscal year. In addition, the County has $8,043,841 in General Fund - Committed Fund Balance not reflected in the actuary report due to GASB 74/75 reporting restrictions.