District trustees hear trust‑fund update; actuary says retention plan about 95% funded

Trustees of Laramie County School District #1 heard an update on trust funds set up in May 2020 to prefund two employee benefit programs and received an actuarial roll‑forward valuation showing strong progress on the retention bonus plan but remaining liabilities on the district’s retiree health obligations.

Mister Ciccarelli, presenting the district summary, said the trusts were created to hold and invest assets dedicated to two specific programs: an early‑retirement health incentive and a retention incentive that pays a lump sum equal to 1% of final salary after 10 years of continuous service. He emphasized these trusts are legally restricted for those purposes and that the plans were closed to new participants (policy changes were made in 2020–2021). Ciccarelli said the trusts were intended to “prefund long‑term liabilities” and reduce annual budget volatility while leaving funding decisions to the board.

The actuary, Paul Wood, described the valuation methodology and the recent funded results. Wood said the 07/01/2025 measurement was a roll‑forward year (a full valuation is performed every other year) and that the discount rate used for the valuation is set by GASB guidance using a double‑A municipal bond index (about 5.2% on the measurement date). “As the rates go up, the liabilities go down, and as those rates go down, the liabilities go up,” Wood said, explaining the sensitivity of liability measures to the discount rate.

Wood reported the retention bonus (treated under GASB 67/68) had a liability of roughly $9.95 million as of the measurement date and said the district’s assets for that plan now cover about 95% of that liability — a substantial increase since funding began in 2020. He described the amortization strategy for the small remaining unfunded amount: the district has shortened the original 20‑year schedule and is now on a 15‑year amortization with an annual amortization payment in the range of roughly $49,000 in addition to ordinary service‑cost contributions. “When this plan becomes fully funded … the only contribution that would be necessary for the district to make is that service‑cost contribution,” Wood said.

On the health‑insurance side (GASB 74/75), Wood said the explicit early‑retirement subsidy (the dollar amount paid toward retiree premiums) was increased in the most recent valuation, which added roughly $3.4 million to the explicit OPEB liability. Wood reported the explicit OPEB liability at about $10.4 million and assets assigned to that plan at about $8.1 million, leaving an unfunded explicit OPEB amount near $2.3 million. He also stressed the larger, unfunded implicit subsidy — the cross‑subsidy that arises because active employees and retirees pay the same premium despite different expected claims — which he estimated at roughly $20.07 million and noted is not currently funded.

Wood reviewed sensitivity testing showing that liability levels respond materially to changes in the discount rate and to health‑care trend assumptions; he also explained GASB recognition rules for deferred inflows and outflows and how assumption changes are recognized over the average remaining service life. When trustees asked whether these closed plans eventually become moot, Wood said the runout can be long — employees hired before closure may still accrue benefits for many years — so the liability persists for an extended period.

No board action was requested during the presentation; the update was informational. The trustees thanked staff and the actuary for the report and moved on to the regular meeting agenda.