2022 Annual Comprehensive Financial Report

System (NCLGERS), and are actively employed with the City at the time of retirement. In order to receive any benefits, retirees must have achieved 20 years of active service with the City or have reached age 60 with 5 years of active service. Healthcare, prescription drug coverage, as well as retiree and dependent life insurance are provided in the City’s Plan. Health and prescription drug coverage ends once the retiree reaches age 65 or becomes Medicare eligible, whichever comes first. The City and retirees share the cost of healthcare, based on years of service at retirement. Approximately 74% is paid by the City for 30 years of service, with less subsidy provided for fewer years of service. Dental coverage is available at full cost to the retiree. Retirees may keep their dental insurance for life. Life insurance benefits of up to $20,000 are provided to retirees until age 65, except for those retirees who were hired before March 1, 1975 (receive $2,000 at age 65 for life). Dependent coverage for each of the benefits in the Plan is available, if enrolled at the time of the employee’s retirement, at full cost to the retiree, with the exception of certain life insurance coverage. In addition, if the retiree ceases to have coverage or dies, dependent coverage will terminate. The City Council may amend the benefit provisions with a resolution. The City has elected to partially pre-pay the future overall cost of coverage for these benefits by establishing a Trust arrangement according to General Statutes 159-30.1(b). Management of the plan is vested in three Trustees, the City Manager, the Director of Finance and the Director of Human Resources, appointed by the City Council. The plan which has a June 30, 2022 year end does not issue a standalone financial report and is included in the City’s Annual Comprehensive Financial Report as Other Postemployment Benefit Trust Fund.

Plan Membership Membership of the Plan consisted of the following at June 30, 2020, the date of the latest actuarial valuation:

Membership Group

Number

Inactive Employees or Beneficiaries Currently

1,830

Receiving Benefits

Inactive Members Entitled To But Not Yet

-

Receiving Benefits

Active Employees

2,992

Total Membership

4,822

Summary of Significant Accounting Policies Postemployment claims and premiums expenditures are made from the Employee Risk Retention Fund (Internal Service Fund), which is maintained on the accrual basis of accounting. Internal charges are made to various other City funds for the respective active employees, based upon the pre-determined City contribution rate. Short-term money market instruments and deposits are reported at cost or amortized cost, which approximates fair value as of June 30, 2022. Certain longer term securities are valued at estimated market value, as determined by the State Treasurer. Administration costs of the OPEB Investment Fund are determined by inter-agency agreement with the North Carolina Department of State Treasurer. Contributions The City will contribute toward the cost of the eligible retiree health and life insurance coverage based on the years of service at retirement. Dental coverage is provided at full cost to the retiree. The City has chosen to fund the healthcare benefits on a pay-as-you-go basis, with additional amounts contributed to prefund benefits, determined annually by management, not as a measure of pay. The current Actuarially Determined Contribution (“ADC”) or $11,356,420 is 7.2% of annual covered employee payroll. For the current year, the City contributed $6,276,738 (or 4.0% of annual covered employee payroll) toward actual benefit payments.

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