NORTH CAROLINA
EXECUTIVE SUMMARY
Meeting Date: 6/22/2009
AGENDA #5n
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TOWN OF CHAPEL HILL NORTH CAROLINA EXECUTIVE SUMMARY |
Meeting Date: 6/22/2009 |
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| Title of Agenda Item: Authorization to Participate in the State Treasurer’s Other Post-Employment (OPEB) Fund. (R-10) | |||
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| Background: The attached Staff Memo provides background on the OPEB liability, the Town's strategy to address its OPEB liability and the Treasurer's Municipal OPEB Fund. | |||
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| Fiscal Note:
Investment of Town’s OPEB funds in the State Treasurer’s Municipal OPEB Fund will increase the estimated annual return from 4% to 7% due to the broader range of investment options available to the State Treasurer. The estimated rate of return is used by the Town’s actuary to determine the total OPEB liability and annually required contribution needed to achieve full funding. Based on preliminary estimates this would reduce our liability by more than 30%.
In addition to customary third party fees related to investment funds the State Treasury will take an administrative fee of 15 basis points (0.15%). The Town has set aside $400,000 in both the FY2008-09 and FY2009-10 budgets to partially fund the OPEB liability. We anticipate that future annual contributions to the fund will increase to eventually equal the annually required contribution to achieve full funding in 30 years. |
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| Recommendations: The Council will consider a resolution authorizing participation in the State Treasurer’s Local Government Other Post-Employment Benefits Fund. | |||
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| ATTACHMENTS: Viewing attachments may require Adobe Acrobat. |
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| Memorandum | |||
| Resolution | |||
| Contribution Agreement | |||