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Deposit Agreement with the North Carolina Department of State Treasurer. The State Treasurer in her discretion may invest
the proceeds in equities of certain publicly held companies and long or short term fixed income investments as detailed in
G.S. 147-69.2(b) (1-6) and (8). Funds deposited are held in the State Treasurer’s, OPEB Long-Term Fund, 11%, OPEB
Equity Fund, 63%, and the NC Short-Term Investment Fund, 26%. At June 30, 2016, the Plan assets totaled $15,182,164. A
separate report was not issued for the Plan.
Membership of the Plan consisted of the following at December 31, 2014, the date of the latest actuarial valuation:
Law
General
Enforcement
Employees
Officers
Retirees
Total
Retirees receiving benefits
979
979
Active plan members
2,317
706
3,023
Total
2,317
706
979
4,002
Funding Policy
The City will contribute toward the cost of the eligible retiree health and life insurance coverage based on the years of service
at retirement. Dental coverage is provided at full cost to the retiree. The City has chosen to fund the healthcare benefits on a
pay-as-you-go basis, with additional amounts contributed to prefund benefits, determined annually by management.
The current Annual Required Contribution (“ARC”) or $8,711,948 is 5.95% of annual covered payroll. For the current year,
the City contributed $4,734,307 (or 3.2% of annual covered payroll) toward actual benefit payments. The City obtains health
care and dental coverage through a self-funded program and through a private insurer for life insurance benefits. The City’s
obligation to contribute to the Plan is established and may be amended by the City Council during the budget process per the
City annual budget ordinance. Determination of the amounts contributed by the City and retirees is made by the Employee
Benefit Executive Committee, annually, upon review of current costs and trends.
Summary of Significant Accounting Policies
Post-employment claims and premiums expenditures are made from the Employee Risk Retention Fund (Internal Service
Fund), which is maintained on the accrual basis of accounting. Internal charges are made to various other City funds for the
respective active employees, based upon the pre-determined City contribution rate. Short-term money market instruments
and deposits are reported at cost or amortized cost, which approximates fair value as of June 30, 2016. Certain longer term
securities are valued at estimated market value, as determined by the State Treasurer. Administration costs of the OPEB
Investment Fund are determined by inter-agency agreement with the North Carolina Department of State Treasurer.
Annual OPEB Cost and Net OPEB Obligation
The City’s annual OPEB cost (expense) is calculated based on the annual required contribution of the employer (ARC), an
amount actuarially determined in accordance with the parameters of GASB Statement No. 45. The ARC represents a level of
funding that, if paid on an ongoing basis is projected to cover normal cost each year and amortize any unfunded actuarial
liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the
City’s annual OPEB cost for the year, the amount actually contributed to the Plan, and changes in the City’s net OPEB
obligation for post-employment benefits:
Annual Required Contribution
8,711,948
$
Interest on Net Pension Obligation
199,691
Adjustment to Annual Required Contribution
(167,788)
Annual OPEB Cost (expense)
8,743,851
Contributions Made
(4,734,307)
Increase (decrease) in Net OPEB Obligation
4,009,544
Net OPEB Obligation-Beginning of Year
2,754,352
Net OPEB Obligation-End of Year
6,763,896
$