District reports major reduction in OPEB liability after HRA and plan changes

District finance staff (identified in the meeting as Troy) told the board the district has substantially reduced long-term retirement-benefit liabilities through plan changes and the implementation of a health reimbursement account (HRA).

"When we started this... the promises we made according to our actuary totaled $42,600,000.0. You go to figure 2... we're down to about $6,300,000.0," the presenter said, explaining the reduction reflects changes in actuarial assumptions and prior retiree-benefit reforms. He described cash-out components for current retirees and an HRA system that funnels forfeiture funds and contributions into accounts to cover future obligations.

The presenter said annual cash outlays for currently retired individuals are roughly $100,000 per year and that the district is using forfeiture-account credits to reduce immediate payments. He reported that, in the presenter’s view, the HRA program has been well received by recent retirees though there have been some administrative issues with a vendor (Mid America).

Board members asked clarifying questions about forfeiture accounts and the allocation of funds. The presenter said the program will continue and that funding alignments are expected to hold without large near-term increases in the district’s retiree-related cash outlays.