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Meeting Date:
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Category:
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Report of the Committee on Accountability, Finance, and Personnel (AFP) |
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Type:
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Subject:
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1. Report and Possible Action on the Actuarial Valuation of the District's Obligation for Other Post-Employment Benefits (OPEB) as of July 1, 2023 |
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Strategic Plan Compatibility Statement:
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Goal 3 Effective and Efficient Operations
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Attachments:
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1. GASB 74 and 75 Actuarial Valuation Results
2. Valuation Report |
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File Attachment:
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Background:
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The Governmental Accounting Standards Board (GASB) is the body that sets the accounting standards for state and local governments.
GASB Statement No. 74, Financial Reporting for Postemployment Benefit Plans Other Than Pensions was issued in June 2015 and amended GASB Statement No. 43. It became effective for plan financial statements for fiscal years beginning after June 15, 2016.
GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions was issued in June 2015 and amended GASB Statement No. 45. It became effective for governmental financial statements of employers for fiscal years beginning after June 15, 2017.
The purpose of this reporting requirement is to establish standards for the measurement, recognition, and display of expenditures for other post-employment benefit (OPEB), related liabilities, and other information in the financial reports of state and local government employers. By definition, other post-employment benefits include medical, dental, vision, life insurance, disability, long term care and other benefits that are provided separately from a defined benefit pension plan.
In addition, on January 4, 2006, Assembly Bill 167 was enacted into law, relating to the investment by school districts of funds held in trust to provide post-employment benefits.
The MPS OPEB Trust Fund has an ending fund balance at June 30, 2024, of $361 million, an increase of $49.7 million from the previous year (FY23). During FY24 the trust received $58.3 million in sponsor contributions and paid out $47.6 million in post-employment benefits. Funds placed in the OPEB trust fund provide resources for future use against the District’s OPEB liability for employees’ post-retirement benefits. The funds can only be used by the District to pay retiree medical, prescription, and life insurance costs, and are not able to be used by the District for any other purpose. The District’s OPEB liability at June 30, 2024 is $791.4 million, a decrease of $62.4 million from June 30, 2023.
The MPS OPEB Trust Fund Investments are currently managed by PFM Asset Management LLC, and the custodian is Midwest Institutional Trust Company. The trust fund investment return was 12.25% for FY24 and 7.62% for FY23. |
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Fiscal Impact Statement:
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The item does not authorize expenditures but is for the purpose of providing information to the Board. |
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Implementation and Assessment Plan: |
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The OPEB valuation report as of July 1, 2023, will be used for the District’s FY24 financial statements. |
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Recommendation
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Your Committee reports having received the foregoing report. Although this item was noticed for possible action, no action is required. |
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Approvals:
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Recommended By: |
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Signed By: |
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Dr. Tina Owen-Moore - Board Clerk |
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