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Oregon Public Employees’ Benefit Board

Oregon Public Employees’ Benefit Board . Other Postemployment Benefits (OPEB) July 1, 2006 Actuarial Valuation PEBB Board Meeting April 17, 2007. Overview of Statement 43/45 Rules. Other Postemployment Benefits (OPEB)

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Oregon Public Employees’ Benefit Board

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  1. Oregon Public Employees’ Benefit Board Other Postemployment Benefits (OPEB) July 1, 2006 Actuarial Valuation PEBB Board Meeting April 17, 2007

  2. Overview of Statement 43/45 Rules • Other Postemployment Benefits (OPEB) • Compensation received after employment ends in exchange for employees’ current service • Benefits other than pension benefits • Healthcare Benefits • Medical – Dental • Rx – Vision • Other Benefits (if not part of pension plan) • Life Insurance – Disability • Group Legal – Long-Term Care • Retiree Discounts (PUD)

  3. Overview of PEBB’s Liabilities • PEBB actuarial liabilities based on the “implicit” subsidy • Actuarial liabilities based on current retirees and current actives who are expected to retire in the future.

  4. PEBB Liabilities and Disclosure

  5. 10 Year GASB Projections – Assuming No Changes

  6. GASB 45 Results for Other Governmental Entities

  7. Why Are Oregon’s Liabilities So Low? • No coverage after Medicare • Retiree pays 100% of “blended” premium • Only 30% of eligible employees elect PEBB retiree health care coverage at retirement • 36% of full-time employees elect part-time/retiree coverage at retirement • Blended premiums favor family tiers (single retiree pays a substantial portion of expected actuarial cost of the retiree’s health coverage)

  8. Potential Options to Lower PEBB’s OPEB Liability(Some Options May Require Statutory Changes) • Reduce/eliminate liability through plan/premium changes for retirees • Have retirees pay premiums based on actual experience (eliminates liability) • Partially subsidize retiree costs (reduced liability) • Reduce plan design by having retirees pick up more costs • Reduce liability through retiree eligibility for coverage • Prefund liability through employer contributions to a trust

  9. Potential Options to Lower PEBB’s OPEB Liability(Some Options May Require Statutory Changes) • Have retirees pay premiums based on actual experience (eliminates liability) • Illustration of the implicit subsidy (based on the three most popular retiree health choices:

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