Which OPEB Pre-Funding Provider is Right for your Agency?Categories: Hot Sheets,OPEB/GASB 45/75
Metropolitan Transportation Commission switches OPEB trusts while the City of Livermore establishes a new OPEB Trust with PARS
Following a period of significant stock market volatility in 2008, Metropolitan Transportation Commission (MTC) sent out a Request for Qualification in July 2009 to select a new administrator for its OPEB funds. Five firms submitted proposals and then an evaluation committee unanimously recommended PARS to the Board. Later that year, the Board adopted the PARS Trust with Union Bank providing trustee services.
MTC transferred their assets from their previous provider into the PARS trust to obtain greater investment flexibility and local control.
MTC was attracted to the fact that they could select between various investment strategies managed by HighMark Capital Management (a wholly-owned subsidiary of Union Bank) as discretionary trustee, including more conservative strategies than was available from their previous provider. With PARS, MTC can also change strategies whenever it wants to adapt to its evolving needs and market conditions.
City of Livermore’s Story
In 2008, the City of Livermore realized that something needed to be done to address the City’s long-term liability for the retiree health benefit program. The City initially established participation with another OPEB trust provider later that year. Two years later, after careful research, the City chose to diversify the funding for the retiree health benefit program by establishing a second 115 OPEB trust. They selected PARS because it has an IRS-approved 115 trust and will reduce the City’s OPEB liability while using more conservative investment strategies.
Holly Brock-Cohn, Administrative services Director comments, “PARS is a full service company with the customer as top priority. They will go out of their way to ensure that their customer’s needs are met. I believe that PARS is the best firm to work with for OPEB and they will assist us in ensuring that our funds are invested in a manner that will meet our City’s needs while providing as much protection as possible in what is an inherently risky situation.”
Trust the Trust Experts
PARS has provided retirement plan design and administration for 28 years and serves governmental agencies exclusively. PARS began providing OPEB consulting services in 1996.
Union Bank, the PARS Trustee, has provided services to post-retirement healthcare plans for 15 years and provides OPEB trust services to over 80 public agencies.
Some other noteworthy advantages that the PARS OPEB Trust program can offer your agency are:
- Discretionary trustee approach minimizing fiduciary risk
- Ability to choose from a wide range of investment strategies from Conservative to Balanced
- IRS-approved 115 Trust
- Assistance with investment policy development
- Local control on actuarial assumptions
- Highly personalized service provided by Senior Consultants from both PARS and Union Bank, including a Senior Portfolio Manager from HighMark Capital Management
Contact us today to see how PARS can help your agency begin to address GASB 45 funding in a way that fits your specific needs.