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City of Pleasanton
<br />Notes to Basic Financial Statements, Continued
<br />For the year ended June 30, 2007
<br />12. POST EMPLOYMENT HEALTH CARE BENEFTTS
<br />A. Plan Description
<br />Attachment 3
<br />The City provides post retirement health care benefits, in accordance with certain employee agreements, to all
<br />employees who retire directly from the City with a minimum of 5 years of service. The effective date varies
<br />based upon the employees classification and related memorandum of understanding (MOU). For all
<br />employees who retire for service, the City shall pay for each year of service, four percent (4°~) of the monthly
<br />premium for the employee and one dependent up to a maximum of 100°h of the City's current Kaiser S-1
<br />Health Plan coverage, except for management employees that have an option to use a second alternative,
<br />based on years of CaIPERS service, as agreed to in its MOU. For all employees who retire for disability, the
<br />City shall pay a percentage of the monthly premium for the employee and one dependent of the City's current
<br />Kaiser S-1 Health Plan coverage in accordance with the applicable MOU. Currently, there are 193 retirees
<br />receiving this benefit.
<br />The following plan design changes were negotiated with IAFF (International Association of Firefighters) in an
<br />effort to limit the growth in future liability. For employees in IAFF retiring from service after January 1, 2008,
<br />the City shall pay for each year of service, four percent (4°~) of the City's monthly premium based on the
<br />lowest HMO medical plan for the employee and one dependent. Effective July 1, 2009, the City contribution
<br />toward any increase in medical plan premium will also be limited to a maximum of 15°~. Also, effective
<br />January 1, 2008 co-pays for office visits and prescription drugs were increased.
<br />The City's GASB Statement No. 45 implementation date is June 30, 2009 to either establish an irrevocable trust
<br />and pre-fund the benefit with existing assets or reflect a net Other Postemployment Benefits (OPEB) obligation
<br />in the entity-wide financial statements. No decision has yet been made in that regard. However, since assets
<br />have been accumulated for this purpose and the liability has been estimated, the following information is
<br />being disclosed.
<br />B. OPEB Reserves
<br />The City's contributions are recorded in the Retirees' Insurance Reserve and Livermore-Pleasanton Fire
<br />Retirees' Insurance Reserve Internal Services Funds (Funds). The following schedule identifies the beginning
<br />balance, annual contributions, payment of benefits, and ending balance for the reserves that are being
<br />accumulated for the purpose of paying retiree medical benefits.
<br />Retiree Medical Reserve Funds
<br />Retiree Insurance
<br />Reserve LPFD Reserve Total
<br />June 30, 2006 Balance $ 21,985,114 $ 9,349,307 $ 31,334,421
<br />2006-2007 Contributions 3,225,000 1,400,000 4,625,000
<br />2006-2007Interest Income 1,237,309 530,447 1,767,756
<br />*Pay-as-you-go benefits (778,290) (406,710) (1,185,000)
<br />June 30, 2007 Balance $ 25,669,133 $ 10,873,044 $ 36,542,177
<br />*Includes $40,588 m professional services for legal and actuarial services but does not
<br />include an implicit rate subsidy of $459,000
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