Marin County Grand Jury
• 2016-2017
Marin’s Retirement Health Care Benefits The Money Still Isn’t There
⚠️ Aviso de traducción: Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 7 findings
F1
Many of the municipalities have decreased their UAAL obligation since FY 2012.
Related Recommendations (1)
R1
Each agency should adopt a formal, written policy for contributions to its OPEB plan.
F2
Some of the schools that have increased their UAAL obligation (since FY 2012) are setting aside OPEB contributions into reserve funds (rather than irrevocable trust funds).
Related Recommendations (1)
R2
Each agency’s standard practice should be to consistently satisfy its formal, written OPEB contribution policy.
F3
Many of the special districts have increased their UAAL obligation since FY 2012.
Related Recommendations (1)
R3
Each agency’s OPEB contribution policy and practice should support a projection under GASB 75 that its OPEB plan assets will be sufficient to make all projected OPEB benefit payments.
F4
Some of the agencies that stated they comply with their actuarial funding guidelines, are not in compliance as shown in their CAFRs.
Related Recommendations (1)
R4
Each agency that uses special reserve funds for Postemployment Benefits should transition to a trust meeting the criteria of GASB 75.
F5
GASB 45 has increased the agency’s reporting transparency, but the information in these financial reports is difficult for the average person to understand.
Related Recommendations (1)
R5
Each term of service, elected or appointed officials of each agency should take a public agency financial class.
F6
GASB 45 permits an agency with a full ARC funding policy in its GASB 45 valuation to increase its discount rate, thereby decreasing its OPEB liability and ARC payments.
Related Recommendations (1)
R6
Each agency should make its CAFRs, Audits, and GASB valuations more readily understandable by the general public.
F7
Upcoming GASB 75 reporting will further improve an agency’s OPEB reporting transparency.
Related Recommendations (1)
R7
Each agency should ensure that all of its public financial presentations are more readily understandable and scheduled during hours convenient for the public.
Additional Recommendations 2
These recommendations are not explicitly linked to specific findings.
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R8Each agency should have the following downloadable and text-searchable documents readily accessible on their website: the last five years of CAFRs/Audits and the last three actuarial reports.
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R9Before the next round of bargaining begins, each agency should prioritize the cost containment strategies to be used, including reducing or eliminating OPEB benefits for future employees.
Conclusions 1
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CL1Other Postemployment Benefits (OPEB) are just one of many financial obligations that public agencies face. Since the amount of the Annual Required Contribution (ARC) is a relatively small percentage for many agencies’ annual total revenue, it is easy for them to not be too concerned (especially when faced by a much larger underfunded pension benefit). However, unlike pensions, agencies have more opportunities to reduce their OPEB obligations. The Grand Jury sees the delicate balance that agencies are facing: attracting new employees, negotiating with existing employees and retirees, and responsibly managing expenses in the public’s interest. While some Marin agencies continue to reduce their unfunded OPEB liability, we are concerned that many agencies still have not yet done so. We hope that this report will give the agencies the additional reminders and tools to address this looming financial burden before more drastic measures need to be taken.