Facts About Retiree Health Benefits
In response to the attached OC Register Watchdog article of September 10,
GASB 43 and 45
In 2004, the Governmental Accounting Standards Board (GASB) issued Statements No. 43 and 45, relating to Other Post-Employment Benefits also known as OPEB (primarily relates to retiree healthcare benefits). These statements require governmental agencies that provide retiree healthcare benefits to recognize the cost of such benefits in a manner similar to defined benefit pension.
The City of Placentia like most governmental agencies accounts for retiree healthcare benefits on a cash basis, meaning that the expense is recognized and reported on the City's financial statement as an annual cash outlay for retiree healthcare premiums. GASB 45 changes the accounting standard from a cash to an accrual basis. The accrual basis of accounting requires employers to recognize and report the value of retiree healthcare benefits earned (based on actuarial standards) by both retirees and active employees.
The City retained an actuary to calculate our unfunded liabilities and a copy of that actuarial (PDF) may be viewed online.
Adjustments to Retiree Costs
In an effort to contain and manage
For more information, please contact the Administration Department via email the Administration or at (714)993-8117.