HomeMy WebLinkAboutIR 9694 INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 9694
To the Mayor and Members of the City Council January 6, 2015
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SUBJECT: OTHER POST-EMPLOYMENT BENEFITS (OPEB) TRUST UPDATE
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During the FY2015 budget development process, the City Council requested a briefing on the
funding strategy for OPEB obligations primarily consisting of retiree healthcare benefits. As a
reminder, a $13.8 million contribution was budgeted for FY2015, with $10.5 million in the General
Fund. However, staff committed to delay any transfers to the trust pending an updated valuation
of the liability and policy recommendation regarding pre-funding versus a pay-as-you go strategy.
Effective January 2009, the City closed its plan by ending retiree health subsidies for all
employees subsequently hired. In October 2014, the City Council had already taken steps to
reduce the liability by implementing various healthcare strategies and also reduced the scheduled
trust contributions by 75%.
The following schedule of activities will lead to a staff recommendation to the City Council on
future funding of retiree healthcare.
December 31 , 2014 Close of health plan year.
January 31, 2015 Completion of pricing analysis of active and retiree health plans by
Gallagher Benefit Services.
February 1, 2015 Issuance of Request for Proposals for Healthcare Administration
beginning in calendar year 2016.
February 28, 2015 Deadline for preliminary actuarial valuation of retiree healthcare
liability.
March 31, 2015 Completion of review of policies of other cities, the impact to the City's
balance sheet, and the guidance of the City's financial advisors
regarding policy options.
April 14, 2015 Briefing on policy options to the City Council.
This schedule will allow sufficient time to incorporate the City Council's policy decisions into the
FY2016 budget formulation. Please feel free to contact Susan Alanis, Assistant City Manager, at
817.392.8180 if you have any questions in the meantime.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS