2020 Comprehensive Annual Financial Report

Discount rate The discount rate used to measure the total OPEB liability was based on the LIRR and the SEIR. The projection of cash flows used to determine the discount rate assumed that contributions from employers will be made to pay benefits directly to Plan members as they come due and to contribute $500,000 to the OPEB Benefit Trust each year. Based on these assumptions, the Plan’s fiduciary net positon was projected to be available to make all projected future benefit payments of the current Plan members until 2033. Therefore, the long-term expected rate of return on OPEB investments was applied to those periods of projected benefit payments and then the SEIR was used to determine the total OPEB liability. Sensitivity of the City’s net OPEB liability to changes in the discount rate The following presents the City’s net OPEB liability calculated using the discount rate of 2.75 percent, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is one percentage point lower (1.75 percent) or one percentage point higher (3.75 percent) than the current rate:

1%

Discount

1%

Decrease (1.75%)

Rate

Increase (3.75%)

(2.75%)

Net OPEB Liability

$ 147,758,655

$ 131,940,179

$ 117,715,566

Sensitivity of the net OPEB liability to changes in healthcare cost trends The following presents the net OPEB liability of the City, as well as what the City’s net OPEB liability would be if it were to calculate healthcare cost trend rates that are 1% point lower or 1% point higher than the current healthcare cost trend rates:

1%

Healthcare Cost

1%

Decrease (6.25%)

Trend Rate

Increase (8.25%)

(7.25%)

$ 111,505,091

$ 131,940,179

$ 156,482,968

Changes in Net OPEB Liability, OPEB Expense and Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB . At June 30, 2020, the City reported a net OPEB liability of $131,940,179. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2018. The total OPEB liability was then rolled forward to the measurement date of June 30, 2020 utilizing update procedures incorporating the actuarial assumptions.

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