2023 Annual Comprehensive Report

Plan Membership Membership of the Plan consisted of the following at June 30, 2022, the date of the latest actuarial valuation:

Membership Group

Number

Inactive Employees or Beneficiaries Currently

2,001

Receiving Benefits

Inactive Members Entitled To But Not Yet

-

Receiving Benefits

Active Employees

2,911

Total Membership

4,912

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, 2023. 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 6.9% of annual covered employee payroll. For the current year, the City contributed $6,975,988 (or 4.2% of annual covered employee payroll) toward actual benefit payments. The City obtains health care and dental coverage through a self-funded program and through a private insurer for life insurance benefits. The City’s obligation to contribute to the Plan is established and may be amended by the City Council during the budget process per the City annual budget ordinance. Determination of the amounts contributed by the City and retirees is made by the Employee Benefit Executive Committee, annually, upon review of current costs and trends. The Plan is accounted for as an OPEB Benefit Trust Fund. Investment Policy and Long-Term Expected Rate of Return Investment of the OPEB Trust funds are made pursuant to a Deposit Agreement with the North Carolina Department of State Treasurer. The State Treasurer in his discretion may invest the proceeds in equities of certain publicly held companies and long or short term fixed income investments as detailed in G.S. 147-69.2(b) (1-6) and (8). Funds deposited are held in the State Treasurer’s Equity Index Fund, 64.90%, the Bond Index Fund, 35.07%, and the Short Term Money Market Fund, 0.03%. At June 30, 2023, the Plan assets totaled $34,243,114. A separate report was not issued for the Plan. The Plan’s investment policy, adopted by the City Council in April 2017, allows for investment in instruments authorized by G. S. 159-30 as well as investments available to the North Carolina State Treasurer when managing funds with the same purpose. The investment policy may be amended by a majority vote of Council members.

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