Lakeland board hears OPEB actuarial review, staff recommends continued contributions
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Summary
Finance staff presented the annual OPEB actuarial valuation showing a large improvement in funded ratio and recommended continuing pay-as-you-go retiree premium payments plus a $150,000 transfer from the general fund to accelerate funding.
Tristan Gaitley Swett, the district finance presenter, summarized the annual OPEB (Other Post Employment Benefits) actuarial valuation for the fiscal year ending June 30, 2025, saying the district's funded ratio has improved substantially and attributing the progress to sustained board contributions.
Gaitley Swett highlighted the executive summary and a two-year comparison showing total liabilities increased while the net liability and funded ratio became more favorable. He noted $313,000 was transferred from the general fund to the OPEB fund in the previous fiscal year and said the actuarial determination of annual required contribution (the ADC) in the report was listed as “225.” He also reported a 10-year trend moving from about 5.7% funded in 2015–16 to 84.5% in 2024–25 and said, with continued contributions, the fund could reach full funding within a few years.
As a result of the valuation and current market assumptions (an updated discount rate from 6% to 6.5%), Gaitley Swett recommended the board continue paying retiree premiums on a pay-as-you-go basis and contribute $150,000 from the general fund this fiscal year. He said both payments were already included in the adopted budget, so no additional board action was required to execute the recommendation.
Board members questioned the timeline for full funding; Gaitley Swett said, under current trends and continued discipline, full funding was likely within four to five years but he would return with information if actuarial assumptions or the ADC changed. A board member noted the fund started at 0% when the Lakeland School System began, underscoring the role of prior board contributions in the current progress.
The board did not take a separate vote on the recommendation because the contributions were part of the existing budget, and the item was presented for information and planning rather than for an additional funding approval.
The district's next steps include using the valuation as a planning tool for upcoming budgets and capital-improvement conversations to ensure anticipated OPEB obligations are incorporated into future funding decisions.