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ii with less than twenty-five (25) years of service with Cabarrus County are eligible for , health and life insurance coverage for 50% of the actual premium. (This amendment appltes to those employees coming to work on or a8er November 1, 2003. Current employees hired prior to November 1, 2003 are grandfathered under the ten year requirement as stated above). 2007 The mission of the GASB is to establish and improve standards of state and local governmental accounting and financial reporting that will result in useful information for users of financial reports and guide and educate the public, including issuers, auditors, ' and users of those financial reports .GASB Statement No. 43 provides guidance for the accounting and financial reporting of trust funds that would be reported by governments that pre-fund their OPEB plans. The County will implement this statement in the financial statements once a trust fund is established for the County's OPEB plan. GASB Statement No. 45 provides guidance for the employer's disclosures for governments that provide any type of OPEB to its employees and retirees, regardless of whether the plan is pre-funded or handled on a "pay as you go" basis (as is currently done). An actuarial study was completed and updated in Apri12007 which is included for your review. The results of the study state the County has a $17,505,771 actuarial liability (i.e., the value of the current OPEB "promise" to current employees and active retirees) as of December 31, 2005. Of the $17,505,771; $5,185,596 is related to current retirees and $12,320,175 is related to active members (current workforce). The study encourages an annual contribution towards this liability in the amount of $1,850,169; however, the actual contribution may be less. In other words, there is no legal requirement to pre-fund the plan. Currently the County participates in the "pay as you go" method through an annual appropriation. In Fiscal Year 2008, for example, the portion of health insurance is estimated at $634,176 for approximately 100 retirees. The County plans to implement GASB 45 in the Financial Statements for the year ending June 30, 2008. In brief, implementing this statement will require disclosing the actuarial liability information in the Notes to the Financial Statement, as well as the liability on the face of the government-wide financial statements that reflects any portion of the actuarial liability that the County chooses not to pre-fund. Future Pre-funding the liability requires the establishment of a trust fund to hold custody of the retiree health insurance benefit funds. Alternatively House Bill (HB) 515/ Senate Bill (SB) 580 -State Treasurer/Local OPEB Investments (attached for your review) will allow local governments to take advantage of the Treasurer's more flexible investment power to get a higher rate of return. The bills establish the Local Government Other Post-Employment Benefits Fund as a trust fund in the Office of the State Treasurer for investments on behalf of participating local governments. Attachment number 2 I -1 Page 310 of 320