Harrison County, TX Improves Liabilities Through PARS OPEB Trust ProgramCategories: Hot Sheets,OPEB/GASB 45/75,Texas Developments
In Northeast Texas along the Louisiana border, Harrison County’s 66,000 residents are known as friendly and industrious people. Primarily a rural and agricultural society in the early 20th century, the County situated within the timberlands has enjoyed proactive leadership and slow growth as it has evolved into a more manufacturing-based economy.
It was part of this forward-thinking that led Commissioners Court Judge Hugh Taylor to look into prefunding solutions for the County’s other post employment benefit (OPEB) liabilities. With the Governmental Accounting Standards Board (GASB) releasing its new standard (GASB 75) recently that will require all OPEB liabilities to be calculated into balance sheets after 2017, Judge Taylor commented, “I think lots of [agencies] in the state of Texas will be found, in the next 24 months, with liabilities exceeding assets. I don’t want [Harrison County] to be one of them.”
Harrison County turned to PARS, who has helped over 170 agencies including 16 counties, to get their OPEB prefunding for retiree healthcare going in the right direction. The County chose the PARS OPEB Trust Program which allows them to retain local control over timing of contributions and investment strategy. With no minimum contribution requirements and access to a range of risk tolerance investments, Harrison County can build out their prefunding strategy to a comfortable level now, knowing they have the flexibility to make changes should the need arise. Soon after the plan design was finished, the Harrison County Commissioners Court voted to adopt the PARS OPEB Trust Program and make an initial contribution. They also plan to prefund future monies into the trust.
By adopting and prefunding into the PARS OPEB Trust Program, Harrison County is immediately establishing a secure method of funding future retiree health benefits that will also allow them to reduce their unfunded liabilities by 30-40% — all of which shows favorably to credit rating agencies.
If your County is interested in preparing for GASB 45/75 by developing an OPEB prefunding plan, contact Mitch Barker at (800) 540-6369 x116 for a complimentary analysis or for any additional questions.