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Board accepts final OPEB actuarial valuation; funded ratios improve, long-term full funding projected near 2043
Summary
Trustees accepted the final actuarial valuation for police and fire OPEB plans showing funded-status improvements (police ~44% to ~48%; fire ~42% to ~48%), a discount-rate increase to 6.25% and projections that liabilities peak in the late 2030s with potential full funding around 2043.
The Police and Fire Retirement Board voted on Feb. 18 to accept the final actuarial valuation for the city's police and fire OPEB plans. Presenters told trustees the valuation shows improved funded ratios driven by investment returns and assumption changes, but that rising health-care premiums partially offset those gains.
Key figures and changes: Actuarial staff reported the police plan's funded status improved from about 44% to about 48% and the fire plan's funded status improved from about 42% to about 48%. Presenters said they increased the discount rate used in the valuation from 6.0% to 6.25% and identified that change as a material factor in lowering the unfunded actuarial liability.
Membership and liabilities: Presenters emphasized the OPEB plans are substantially smaller than the pension plan (citing roughly $500 million in police liabilities and $300 million in fire liabilities versus multi-billion-dollar pension liabilities). They described a long-term shift as the plans age: active membership that receives full benefits is declining while retiree counts and retiree benefit payments are increasing (presenters reported retiree counts rising from roughly 1,200 to about 1,500 over the period shown).
Projections and amortization: The board was shown projections in which plan liabilities peak around 2037'038 and assets are projected to grow faster than liabilities under baseline assumptions; presenters gave an illustrative date of about 2043 when the plan may approach full funding if current trends continue. Actuarial staff also highlighted the board's amortization policy (three-year phase-in/phase-out) and said a 2017 amortization base remains the single largest driver of city contributions; when that layer is paid off (projected ~2043) city contributions are expected to drop significantly.
Vote and action: Trustee Vados moved to accept the final valuation, the measure was seconded, and trustees approved the staff recommendation by voice vote. Presenters and trustees thanked the actuarial team for completing the season's work.
What this does and does not change: Presenters emphasized that member contribution rates are set by statute (fixed at 8%) and are not changed by the valuation; the valuation affects city contribution projections and budget planning. The board also discussed an accompanying letter that presents five- and 20-year projections for the city's budgeting process; staff said the letter is transmitted to the city and no separate board action was required on it.
Next steps: Actuarial staff will provide the materials to the city for budget use and remain available to respond to follow-up trustee questions about assumptions, premium drivers and amortization layers.
