02-14-11 Regular Meeting of Fiscal Affairs Committee

Browse Search

CITY OF LA PORTE, TEXAS Notes to the Financial Statements September 30, 2010 10. Post - Employment Benefits - continued years but Tess than 15 years of service are required to pay for 20% of their costs. For employees who retire after January 1, 2000 the following applies: Years of Service with City Retiree Cost City Cost Retiree Cost Per Year At least 10 but less than 15 years 55% 45% $3,300 At least 15 but less than 20 years 25% 75% 1,500 At least 20 years 0% 100% 0 Employees who are eligible for the post employment benefits are employees who retire after January 1, 2006 and who have a combination of years of service with the City of La Porte plus age totaling 80 and who retire as a qualified annuitant under the Texas Municipal Retirement System; who retire in accordance with the City of La Porte Employee Policies Handbook; who complete at least 20 years of service with the City of La Porte are currently employed by the City of La Porte at the time of their retirement. The total premium cost is the total annual dollar allocated by budget as approved by City Council for the City of La Porte for health insurance for each employee, including employee and employer contributions. The cost allocation shall be as follows: Years of Service Retiree City with City Cost Cost at least 20 years 60% + dependent premiums 40% 21 years 55% + dependent premiums 45% 22 years 50% + dependent premiums 50% 23 years 45% + dependent premiums 55% 24 years 40% + dependent premiums 60% 25 years 35% + dependent premiums 65% 26 years 30% + dependent premiums 70% 27 years 25% + dependent premiums 75% 28 years 20% + dependent premiums 80% 29 years 15% + dependent premiums 85% 30 years 10% + dependent premiums 90% Retirees who are entitled to receive retirement benefits under the City's retirement plan may purchase continued health benefits for the retiree and the retiree's dependents. The person must inform the City no later than the day on which the person retires that the person elects to continue coverage. If the retiree elects to continue coverage for himself and /or his dependents, once he decides to drop either type of coverage, the person and /or his dependents become eligible for coverage at the next open enrollment period. The level of coverage provided is the same level of coverage provided to current employees. The City's coverage is secondary to Medicare when the person becomes eligible for those benefits. Payment for dependent coverage will be at the same rate as payments for current employees. Annual OPEB Cost and Net OPEB Obligation. The City's annual other postemployment benefit (OPEB) cost is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 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 OPEB obligation to the postemployment medical plan. 72