2023 Annual Comprehensive Report

Changes of assumptions. Changes of assumptions and other inputs reflect a change in the discount rate from 4.02% in 2022 to 4.11% in 2023. Medical claims cost and rates were changed based on most recent experience and changed to the current schedule. The impact of the Affordable Care Act was addressed in the valuation report and continues to be monitored. For the year ended June 30, 2023, the City recognized OPEB expense of $4,145,800. At June 30, 2023, the City reported deferred outflows and inflows of resources related to OPEB from the following sources:

Deferred

Deferred Inflows of Resources

Outflows of Resources

Differences between expected and actual experience

$

$ 17,729,794

Changes of assumptions

11,404,194

13,465,328

Net difference between projected and actual earnings on plan investments

1,072,436 12,476,630

Total

$

$ 31,195,122

Amounts reported as deferred inflows and outflows of resources related to OPEB will be recognized in OPEB expense as follows: Year ended June 30: 2024 (5,969,941) $ 2025 (4,913,773) 2026 (1,616,736) 2027 (4,084,356) 2028 (1,890,743) Thereafter (242,943) $ (18,718,492) H. Deferred Compensation The City offers all of its employees a Deferred Compensation Plan (Plan) in accordance with Internal Revenue Code Section 457 and 401. The Plan, available to permanent City employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to employees until termination, retirement, death or unforeseeable emergency. The City has complied with changes in laws which govern the City’s Plan, requiring all assets of the Plan to be held in trust, custodial accounts or into annuity contracts for the exclusive benefit of participants and their beneficiaries. Effective January 1, 1999, the City entered in a trust arrangement. All transactions are administered by third party administrators and accordingly, Plan assets are not included in the City’s financial statements. The City contributes 3.25% of salary for participating full time employees to the 401(a) Plan. The City also contributes an additional 1.75% to a 401(a) plan prior to FICA deduction of salary if applicable, for those engaged in firefighting, if firefighters choose to defer at least 1.75% of their salary, as well. Those employees engaged in law enforcement may participate in the 457 Plan, however, no City contributions are made on their behalf, but instead, the City contributes 5% of salary to the 401(k) Defined Contribution Pension Plan. All employees may defer amounts in the 457 Plan, administered by Mission Square Retirement, and the 401(k) Plan, administered by Empower for the State of North Carolina and its subdivisions, up to the maximum allowed by the Internal Revenue Service each year. The employee receives credit for his contribution as well as the City’s, and benefits are based on the total assets owned in the employee’s individual accounts. The fair market value of the deferred compensation accounts of employees through the year ended June 30, 2023 was $221,355,104 consisting of $132,237,249 (457), $56,450,497 (401(a)), and $32,667,358 (401(k)).

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