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Fairfax says retiree-health trust covers more than recorded liabilities in GASB 75 report
Summary
Finance staff and the town ctuary told the Fairfax Town Council that an actuarial valuation for fiscal year 2025 shows about $1.9 million in OPEB liability and roughly $2.0 million in CERBT assets, meaning the town is about 104% funded on the books; the council will consider whether to continue a $150,000 contribution in the coming budget.
At its Feb. 4 meeting, the Fairfax Town Council heard an annual actuarial review of the town's other post-employment benefits (OPEB) liability under Governmental Accounting Standards Board Statement 75.
Finance director Michael Viverette told the council the valuation shows an actuarial accrued OPEB liability of about $1.9 million and roughly $2.0 million in assets held in the California Employers' Retiree Benefit Trust (CERBT). "We have funded a 104% of the liability that's on the books," Viverette said, adding that the town's position is buoyed by investment performance and earlier funding actions.
The presentation, prepared by an actuarial firm, explained the two primary sources of postretirement benefits: (1) a PEMHCA (CalPERS/PEMHCA) contribution that reduces retirees' premiums and (2) contractually negotiated retiree premium contributions in memoranda of understanding with employee groups. Viverette said the town typically budgets a contribution in the $100,000 nd $150,000 range; the current fiscal year includes a $150,000 contribution but council members discussed whether that should be adjusted now that the asset-to-liability ratio exceeds the 80% funding target the town has sometimes used as a guideline.
Tina, the actuary on the Zoom line, answered technical questions about discount-rate assumptions and demographic trends. "As your discount rate goes up, your liability goes down," she said, explaining that investment return assumptions and health-premium trends both materially affect the next valuation. She also cautioned that valuations change with assumptions and that the funded position is not necessarily permanent.
Council members and members of the public asked for better visuals and historical balance-sheet context. Public commentator Todd Greenberg requested the town's audited balance sheets and 20 years of context; Viverette said annual audited statements (including balance sheets) are posted with the town's audits and reiterated that CERBT assets are restricted for retiree health. "These funds can only be used for OPEB payments," he said, describing CERBT's restrictions and the council's discretion over whether to make the budgeted annual contribution.
The council did not take immediate policy action but put the issue on the list of items to review in the upcoming budget workshop, where staff will outline alternatives for contributions and potential impacts under different discount-rate or premium scenarios.
