GASB 75 Employer Reporting Other Postemployment Benefits (OPEB) Fiscal Management, Fiscal Integrity, Financial Reporting

Key Concepts

– Plan’s fiduciary net position Net OPEB liability = Basis of Accounting - Full Accrual Formula for Measuring Net Pension Liability Total OPEB liability – Plan’s fiduciary net position Net OPEB liability =

Three steps of measuring total OPEB liability (TOL) Projecting Discounting Allocating Measuring plan’s fiduciary net position

Three important dates for OPEB reporting Financial statement date Actuarial valuation date Measurement date (& measurement period) Not earlier than the prior FYE 8/31/17 OPEB plans Measurement period is FY 17

OPEB amounts Net OPEB liability (NOL) Current NOL Non-Current NOL Deferred outflows of resources related to OPEB Deferred inflows of resources related to OPEB OPEB expense Changes in NOL in the measurement period Expensed immediately Deferred and amortized into expense

Changes in NOL deferred and amortized into expense: Difference between expected and actual experience (what really took place during the FY) Assumption changes (actuarial) Difference between projected and actual investment return Employer specific adjustments (what happened after the measurement date) Employer Specific Adjustment – 2nd year of implementation (Verifying)

Amortization period expense (Deferred Inflows/Outflows) Recognition of experience changes Recognition of assumption changes Recognition of difference in investment return OPEB expense Service costs Interest on Total OPEB Liability Member contributions Projected investment return Administrative costs Employer Contributions Proportion and proportionate share Proportion is percentage Proportionate share is amount

Employer specific adjustments Additional adjustments for (after the measurement date in PY): Change in proportion Contribution difference Will change proportionate share of OPEB expense and deferred outflows and inflows Will NOT change proportionate share of ending NOL for current FY

Disclosure Requirements

Note Disclosure Requirements Discount rate Single blended rate LT expected rate of return - methods and assumptions Municipal bond rate and source (if applicable) Periods where each rate applied Sensitivity analysis Assumption and benefit changes Asset allocation and LT expected real rate of return by asset class OPEB expense

Note Disclosure Requirements Schedule of OPEB deferred outflows and inflows by source Amortization of OPEB deferrals in future years Schedule of Changes in NOL for current period Proportion, proportionate share of collective NOL and change in proportion Measurement date and actuarial valuation date

RSI Requirements 10-year schedule of changes in NOL and related ratios or 10-year schedule of proportionate share of collective NOL and related ratios 10-year schedule of employer contributions Notes to schedules

Financial Statement Impact

Without Proprietary Funds Statement of Net Position NOL – Net OPEB Liability Deferred Outflows of Resources Deferred Inflows of Resources Statement of Activities OPEB Expense State agencies with independent audited reports. Statement of Net Position – NPL, where does in go on the statement? Noncurrent Liablities? Financial Reporting will post the state’s collective NPL, deferred outflows, deferred inflows and pension expense to FT 12 (on GAAPR?)on the Government wide statements. The proportionate percentage will be provided to each agency that issues independent audited reports so that each agency can calculate their proportionate share of the collective amounts that will be reported in governmental activity or proprietary fund and business-type activities (if applicable) on their independent audited reports. The Pension Expense with be shown where on the statement of activities?

With Proprietary Funds Statement of Net Position NOL – Net OPEB Liability Deferred Outflows of Resources Deferred Inflows of Resources Statement of Revenues, Expenses, and Changes in Net Position OPEB Expense Statement of Cash Flows Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used in) Operating Activities State agencies with Proprietary Funds Statement of Net Position – NPL where does in go in the statement? Noncurrent Liablities? Statement of Revenues, Expenses, and Changes in Net Position – Pension Expense will be in the Operating Expense Section. Statement of Cash Flows – Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities On the reconciliation, Operating Income (Loss) will change by the amount shown for Pension Expense. Net Cash Provided by (Used in) = Net Cash used in Operating Activities