Actuarial report: Monticello OPEB liability about $14.9M; district may rely on levy

Jill Erldahl from USA Consulting Group presented the district’s actuarial valuation of other postemployment benefits (OPEBs) on Nov. 17.

Erldahl explained that the valuation covers two primary components of postretirement benefits: direct subsidized benefits explicitly provided in contracts and an implicit rate subsidy created by Minnesota statute that requires retired public employees to be offered access to group medical and dental plans at active-employee group rates (statute referenced in the presentation). She illustrated how that implicit subsidy creates a hidden liability for early retirees before Medicare eligibility.

Erldahl reported an accrued OPEB liability of roughly $14,900,000 based on a July 1, 2024 valuation and said the consultant reviewed data for about 466 active participants and 62 retirees. Actual OPEB payments for 2024–25 were about $1.8 million. The district held just under $1 million in an irrevocable OPEB trust at year end, leaving most OPEB payments funded through an annual OPEB levy allowed by the Minnesota Department of Education for the unfunded portion of benefits; Erldahl said the district could apply for about $1.7 million of levy authority in 2024–25 to cover unfunded payments.

Erldahl cautioned that MDE levy limits are subject to statewide demand and advised districts to seek written confirmation from MDE for unusual levy proposals. She also summarized smaller GASB 73 postemployment pension-like liabilities (about $320,000), bringing combined postemployment-benefit payments to roughly $1.9 million for the year.

Board members asked whether a concentrated group of retirements could exceed levy capacity; Erldahl said limits are driven by the number of districts applying, and the state prorates funds only when necessary.