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Finance staff reports OPES trust more than fully funded; actuarial study shows 114.9% funded with investment gains
Summary
Staff told the committee the Other Post-Employment Benefits (OPES) trust has exceeded full funding, reporting $10 million-plus in assets, roughly $1.3 million in investment gains and a 114.9% funded ratio on the most recent actuarial review; staff noted future retiree payouts will raise contribution needs over the next decade.
Finance staff briefed the committee that the city's OPES trust has grown above the target funding level. The city's trust has more than $10 million in assets and showed about $1.3 million in investment gains in the recent period; the most recent actuarial review calculated a funded ratio of approximately 114.9 percent.
Danielle said the trust's asset allocation is currently within the city's policy ranges: equity not to exceed 50%–75% (purple line in the packet chart) and fixed-income target ranges of 25%–50%; staff said the portfolio has hovered around a 65% equity allocation and roughly 35% fixed income. The city's investment manager is US Bank, which continues to manage the trust.
Nut graf: because the trust is more than fully funded on the current actuarial basis, the city's determined contribution has decreased in recent years; staff cautioned, however, that retiree payout needs will grow over the next decade and will likely increase contribution requirements later.
Ending: staff will continue to monitor investments and the actuarial schedule and report back as needed; no action was taken.
