Sensitivity of the Net NHRS Medical Subsidy OPEB Liability to Changes in the Discount
Rate
The following presents the net OPEB liability calculated using the discount rate of 6.75%,
as well as what the net OPEB liability would be if it were calculated using a discount rate
that is one percentage-point lower or one percentage-point higher than the current discount
rate:
Current
1% Discount 1%
Decrease Rate Increase
$ 25,448,565 $ 23,435,551 $ 21,687,860
Healthcare Cost Trend Rate
Healthcare cost trend rates are not applicable given that the benefits are fixed stipends.
City OPEB Plan
The following OPEB disclosures for the City OPEB Plan are based on an actuarial
valuation performed as of June 30, 2020, using a measurement date of June 30, 2021.
General Information about the OPEB Plan
Plan Description
The City provides post-employment healthcare benefits for retired employees through the
City’s single employer defined benefit OPEB plan. The City provides health insurance
coverage through the City’s self-insured employee benefits fund. The OPEB plan is not
administered through a trust that meets the criteria in paragraph 4 of GASB 75 and does
not issue a standalone financial report.
The City indirectly provides post-employment healthcare for retired employees through an
implicit rate covered by current employees. Retirees of the City who participate in this single-
employer plan pay 100% of the healthcare premiums to participate in the City’s healthcare
program. Since they are included in the same pool as active employees, the insurance rates
are implicitly higher for current employees due to the age consideration. This increased
rate is an implicit subsidy the City pays for the retirees.
Benefits Provided
The City provides medical and prescription drug insurance to retirees and their covered
dependents. All active employees who retire from the City and meet the eligibility criteria
will receive these benefits.
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