FY 2009 Comprehensive Annual Financial Report - Harford County ...

HARFORD COUNTY PUBLIC SCHOOLS
NOTES TO FINANCIAL STATEMENTS
June 30, 2009
NOTE 6 - POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS
(continued)
Life Insurance Benefits - The Board pays 90% of the life insurance premiums for retirees
with at least 10 years of service with the amount of insurance coverage reducing from
$20,000 upon retirement to $10,000 five years after retirement. The life insurance benefits
paid by the Board for the year ended June 30, 2009 was $42,782. As of June 30, 2009, 1,694
of approximately 1,926 eligible participants were receiving benefits.
Annual OPEB Cost and Net OPEB Obligation
The Board's annual other postemployment benefit (OPEB) cost (expense) is calculated based on
the annual required contribution of the employer (ARC), an amount actuarially determined in
accordance with the parameters of GASB Statement 45. The ARC represents a level of funding
that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any
unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The
following table shows the components of the Board's annual OPEB cost for the year, the amount
actually contributed to the plan, and changes in the Board's net OPEB obligation:
Annual required contribution $ 36,021,000
Interest on net OPEB obligation 340,000
Amortization of net OPEB obligation (337,000)
Annual OPEB cost (expense) 36,024,000
Contributions made -
Increase in net OPEB obligation 36,024,000
Net OPEB obligation - beginning of year 8,489,815
Net OPEB obligation - end of year $ 44,513,815
The Board's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and
the net OPEB obligation for the year ended June 30, 2009 was as follows:
Fiscal Year Annual Percentage of Annual OPEB Net OPEB
Ended OPEB Cost Cost Contributed Obligation
6/30/09 $50,794,000 29.1% $44,513,815
Funded Status and Funding Progress
As of July 1, 2008, the most recent actuarial valuation date, the plan was 2.1 percent funded. The
actuarial accrued liability for benefits was $589,795,000, and the actuarial value of assets was
$12,136,368, resulting in an unfunded actuarial accrued liability (UAAL) of $577,658,632. The
covered payroll (annual payroll of active employees covered by the plan) was $278,038,509, and
the ratio of the UAAL to the covered payroll was 207.76 percent.
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