Oregon Public Employees

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 PEBBs 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 Oregons 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 retirees health coverage)

8
Potential Options to Lower PEBBs 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 PEBBs 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