OPEB/GASB 45

PEPRA: What’s next?

The most significant pension reform law in decades went into effect January 1.  The Public Employee Pension Reform Act (PEPRA), creates a lower tier of benefits for new public employees and makes several changes to the retirement

California’s public retirement systems’ pension obligations were a combined $112 billion beyond the value of their assets in 2010, according to a report released this week, with anticipated retiree health costs adding another $77 billion in unfunded liabilities.

This letter report presents a review conducted by the Bureau of State Audits (bureau) concerning the State’s efforts to manage the financial risks associated with the costs of other postemployment benefits—or benefits in addition to pensions. Commonly referred to as OPEB, other postemployment benefits encompass primarily medical and dental insurance provided to retired state employees.

Since its inception in 2004, GASB 45 has prompted many public agencies to address their unfunded OPEB liabilities by pre-funding into an irrevocable trust. While an agency may choose to set up its own trust, most have joined multiple-employer trusts,

Contra Costa Mosquito & Vector Control District wanted to be proactive in addressing its future retiree health obligations.  After determining its unfunded liability, the District began exploring suitable pre-funding options. The District found that the right solution was participating in