1. Nerds Talking OPEB & Pensions
State Association of County Auditors
April 2017

3. Other Postemployment Benefits
Napa County The Basics Began Trust Contributions in Fiscal Year Elected a 14 year closed amortization period Elected a 20 Year Fresh Start in Fiscal Year California Employees Retirement Benefit Trust Managed by CalPERS

4. Other postemployment benefits
Actuarial Determined Contributions Funded Each Year Contribution to CERBT Made Quarterly- True-up at Year End Pay-As-You-Go Paid Outside of the CERBT CERBT Invested in CalPERS Strategy 1, Most Aggressive

5. Other postemployment Benefits
Fiscal Year
Contribution
Disbursements
$4,320,628
$--
$4,352,252
$2,858,074
$2,783,630
$4,211,368
$4,243,097
$4,230,867
$4,305,498
$6,066,750
$4,888,000
The reduction in reflects the increase in pay-as-you-go amounts now that the implied subsidy is in full force.

6. Other postemployment benefits
Funded Status
As you can see, the large jump in the Accrued Liability between 2011 and 2013 reflects the County’s early adoption of ASOP 6, and the inclusion of the implicit subsidy. Just when you think you are making real progress, the actuaries change the rules.

7. Other postemployment benefits
Moving Forward No Change in Benefits Anticipated – Recently reduced benefits for elected officials Funded Status Continues to Rise Investment Risk Continues to Increase Shift from Asset Growth to Asset Preservation Outlook Change in Investment Strategy Change in Funding Strategy – Lump Sum in July Consider Opening a Second Trust Develop a Plan to Begin Drawing from CERBT

8. Pension

9. pension
Napa County Two Plans – Miscellaneous and Safety Cost Sharing Built into Both MOUs Reduced Benefit Tiers Added to Both Plans in 2011

10. PEnsion Competitive Disadvantage
New Tiers – Classic Members now earn decreased benefits
Cost Sharing, a blessing and a curse
Miscellaneous, manageable
Safety, problematic

11. pension Napa County Section 115 Trusts Discussed with Grand Jury
Proposed to County Executive Office
Recommended by the Grand Jury
Rejected by the County Executive Office

12. Pension Section 115 Trust Napa Challenges
Funding - Don’t have the money!
Claimability
Education
Benefits
Demonstrate sound financial accountability
Irrevocable flexibility – two year reimbursement
Rate stabilization
Custom investment strategy
Credit rating
The biggest challenge we faced was the one caused by the idea being summarily dismissed because it didn’t originate with the CEO. We sometimes become single minded and can’t address multiple challenges at once. We get paralyzed when choices aren’t obvious

13. Pension Acceptance PERS decision to lower the discount rate
Estimated increase in ER contribution
Review of impact on cost sharing
Visually being able to show the pending impact of the discount rate change
Actuary recommendation

14. Pension Funding Goal Internal demand on one time money
Build in a funding discipline
Unused budgeted retirement
Estimated savings from prefunding ER contribution
Direct cost sharing savings into the plan or a trust
First, no that is not a self portrait

15. Amortization Periods & methods
Analyzing the Cost/Benefit Ratio of Amortization Changes
Analyze the inventory of unfunded liabilities
Impact of smoothing ramps
Understanding the cost of long amortization lives
Dealing with plans with no active employees
PEPRA & other immature tiers

16. Future
Hard decisions – Prioritizing our largest liabilities Pray for investment returns!!!!!!!!