Officials review OPEB, LOSAP and sheriff retirement valuations; board weighs pre‑funding and budget tradeoffs

County finance and HR staff briefed the Board of Commissioners on retiree benefit valuations on Feb. 9, presenting the latest actuarial reports for the county’s OPEB (other post‑employment benefits) trust, the LOSAP volunteer retirement program and the sheriff’s office retirement plan.

CFO Elaine Kramer explained that the most recent valuation for county retiree health (the OPEB plan) showed an actuarial accrued liability (AAL) for service to date of about $95.6 million and trust assets of roughly $63.6 million, leaving a net unfunded balance (unfunded liability) in the range discussed in the valuation. Kramer stressed these figures relate to employees electing county health coverage; the report separates active employees and retirees in pay status and uses a 6% discount rate in the valuation assumptions.

Kramer outlined why the county adopted a mix of benefit changes and prefunding steps in earlier years: a prior change to vesting rules for retiree health and a county decision to place initial fund balance into the trust reduced the near‑term actuarial contribution compared with the initial unfunded estimate. Kramer said those measures were designed to make the long‑term obligation more sustainable and to reduce future required annual contributions.

Using a simple illustration, Kramer demonstrated the budget mechanics of prefunding versus PAY‑GO (pay‑as‑you‑go) payments: a trust accumulates investment earnings and matches benefit payments to the service years that generated the obligation, while PAY‑GO pushes payments into later years when taxpayers that benefited from the service may no longer be the ones paying the cost.

On LOSAP — the length‑of‑service program for volunteer fire and rescue members — the county received its first valuation and saw an estimated liability of about $17 million with no assets at the valuation date. County staff recommended an initial trust contribution of $400,000 for FY2016 to establish funding momentum while the county continues to evaluate longer‑term funding sources; staff noted a portion of LOSAP expense will remain PAY‑GO (benefit payments) and will continue to be budgeted in the emergency services support fund.

For the sheriff’s retirement plan (a defined‑benefit plan separate from county general OPEB), the valuation shows its own AAL and a funded ratio around the mid‑60s percent range in the most recent report. Kramer and staff said actuarial results vary with changes to assumptions (mortality, payroll growth, COLA/step policies) and with actual investment performance; those factors explain why actuarial liabilities often change year‑to‑year.

Commissioners asked staff for more granular information. Requests included: the FY2015 PAY‑GO portion of OPEB versus the trust contribution; the split between PAY‑GO and trust funding for LOSAP; how much of recent prefunding came from one‑time fund balance transfers; and scenario runs showing the effect of smaller or larger ongoing contributions. Kramer agreed to provide the requested breakdowns and to work with the actuary and trustees to present clearer multi‑year projections at future budget meetings.

No formal action was taken at the Feb. 9 session; staff recommended continuing the current valuation schedule and returning to the board with the additional requested scenarios for consideration during the FY2016 budget process.