Cabarrus County Comprehensive Annual Financial Report

Home Browse Search

Cabarrus County, North Carolina Notes to the Financial Statements For the Year Ended June 30, 2012 basis. In the future, employees and retirees may be required to participate in premiums for basic group health and life insurance plans. The plan was established and may be amended by the Board of Commissioners. The current Annual Required Contribution rate is 8.85 % of annual covered payroll (5.76% normal cost and 3.09% accrued liability). The County contributed $1,371,402 or 3.9% of annual covered payroll for the current fiscal year. The County is self insured for healthcare coverage. The County’s required contributions for employees not engaged in law enforcement and for law enforcement officers represented 2.7% and 1.2% of covered payroll. Contributions of $50 per month were made by employees and retirees who currently use tobacco products and have not signed a non use tobacco certification. These contributions were $47,300 for the current year. There were no other contributions made by employees, except for dependent coverage in the amount of $966,850. Summary of Significant Accounting Policies. Postemployment expenditures for former employees are made from the General Fund. This fund is maintained on a modified accrual basis of accounting. No funds are set aside to pay benefits and administrative costs. These expenditures are paid as they come due. Annual OPEB Cost and Net Pension Obligation. The County’s annual OPEB cost (expense) 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 County’s annual OPEB cost for the year, the amount actually contributed to the plan, and changes in the County’s net OPEB obligation for the healthcare benefits: The County’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation were as follows: For Year Ended Annual Percentage of Annual Net OPEB June 30 OPEB Cost OPEB Cost Contributed Obligation 2008 $1,850,169 28% $1,341,176 2009 $2,156,844 27% $2,912,737 2010 $2,529,209 27% $4,765,234 2011 $2,525,090 26% $6,634,194 2012 $3,072,279 44.6% $8,335,071 Funded Status and Funding Progress. As of December 31, 2011 the most recent actuarial valuation date, the plan was not funded. The actuarial accrued liability for benefits and, thus the unfunded actuarial accrued liability (UAAL) was $27,978,569. The covered payroll (annual payroll of active employees covered by the plan) was $34,588,322 and the ratio of the UAAL to the covered payroll was 80.9%. Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality and healthcare trends. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the 71