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City of Pleasanton Notes to Basic Financial Statements, Continued For the year ended June 30, 2007 12. POST EMPLOYMENT HEALTH CARE BENEFITS, Continued C. Estimated OPEB Measures -GASB #45 Basis The following schedule reflects the estimated Actuarial Accrued Liability (AAL) at June 30, 2007 under two scenarios, one with an earnings assumption of 4.25°~ and one with 7.75°~. OPEB Estimates at June 30, 2007 Actuarial Accrued Liability (AAL) Non-Fire Fire Total 4.25% 7.75% $ 77,045,000 $ 50,876,000 41,467,000 26,197,000 $ 118,512,000 $ 77,073,000 The Annual Required Contribution (ARC) is the amount an employer would contribute to pre-funding the plan using GASB #45 measures. Based upon the AAL at June 30, 2007 the calculation of the 2007-08 Annual Required Contribution (ARC) is shown in the schedule below. The estimates for the 2007-08 ARC are shown in two scenarios; one with existing assets not invested in an irrevocable trust with an earnings assumption of 4.25°k and another with assets invested in an irrevocable trust with earnings assumptions of 7.75°h and amortized over either a 20 year or 30 year period. These two scenarios are intended as low and high "book end" measures. The ARC is likely to fall between these two numbers once GASB #45 is implemented. It is the intention of the City of Pleasanton to begin prefunding using these measures prior to June 30, 2009, the required implementation date for GASB #45. Annual Required Contribution (ARC) 2007-08 ARC without investng Reserves in irrevocable Trust Percent of Payroll 2007-08 ARC after investing Reserves in irrevocable Trust Percent of Payroll 5,696,000 $ 5,038,000 13.5% 12.0% Note: The actua12006-07 contribution to reserves was $4,625,000 or 10.2% of actual payroll. The budgeted contribution for 2007-OS is $6,028,400, or 12.8% of projected payroll. The amounts that will be reported in the City's annual financial report when Statement #45 is implemented will depend on the actuarial methods and assumptions chosen for the actuarial valuation and whether the plan is administered as a qualified OPEB plan trust. These estimates are based on the substantive plan (the plan as understood by the employer and plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between employer and plan members to that point. 4.25% 7.75% 20 year 30 year 20 year 30 year $ 12,367,000 $ 10,328,000 29.4% 24.6% 75