Another County Joins the PARS OPEB TrustCategories: Hot Sheets,OPEB/GASB 45/75
The County of Amador recently adopted the IRS-approved PARS 115 trust following in the footsteps of the Counties of Inyo, Merced, Mono, Shasta, Solano, Sonoma and Trinity
The County of Amador’s actuarial valuation in June of 2009 showed the costs of various strategies for funding the County’s approximately $5 million GASB 45 liability. The Board prudently opted to pre-fund the obligation in order to lower and stabilize its costs over time. In August 2009, the Board directed staff to investigate the available options of funding into a GASB-compliant irrevocable trust. The staff narrowed it down to PARS (Public Agency Retirement Services) and CalPERS. Eventually, the County selected the PARS OPEB Trust to pre-fund its GASB 45 liability.
The OPEB Committee for the County of Amador comments, “We were looking for an OPEB Trust provider who offered the best return and security and most flexibility for the County. Only PARS provided a favorable Private Letter Ruling from the IRS and encouraged the County’s participation in choosing an investment strategy and risk tolerance level.”
The County cited the following key factors in its decision:
- Assets are held in trust by Union Bank, the second largest trust division in California, with the bank assuming discretionary trustee authority to maximize the County’s fiduciary protection.
- PARS provides the protection of an IRS Private Letter Ruling, assuring the tax exempt status of current and future benefits to retirees, employees and beneficiaries.
- The PARS OPEB Trust gives the County input on selecting the strategy, target yield, and risk tolerance of its investments.
- It also offers discretion in determining annual contributions to the trust. The County is not obligated to a specific or fixed contribution and no minimum contribution is required. This was particularly important given the County’s size.
The PARS/Union Bank OPEB Trust
Although governmental agencies are not required to pre-fund their GASB 45 OPEB obligation, most view it as the prudent choice. Pre-funding is the most cost-effective way to manage this liability and lower costs long term.
What sets PARS apart from other GASB 45 programs?
- 15 years of OPEB Trust experience
- An IRS-approved 115 OPEB Trust and Plan
- The maximum level of fiduciary protection for employers
- A streamlined implementation process
- Flexible investment options to meet an agency’s risk tolerance
- The highest degree of personal service
- Easy-to-use trust without “red tape”
Members of the PARS OPEB Trust have the ability to design and implement the plans they need while reducing the administrative, compliance and fiduciary burden. PARS is a leader in designing, implementing and administering retirement and OPEB plans for governmental agencies.
PARS’ service is unparalleled. Each member agency’s plan is locally-controlled and designed to each agency’s specifications. PARS has a long-standing commitment and a well-established track record in creating innovative, competitive retirement solutions designed to meet the unique needs of each of our public sector clients.
Contact us today to see how PARS can help your agency.