Comprehensive Annual Financial Report - Harford County Public ...

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HARFORD COUNTY PUBLIC SCHOOLS NOTES TO FINANCIAL STATEMENTS June 30, 2012 NOTE 6 - POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (continued) Annual OPEB Cost and Net OPEB Obligation The Board's annual other postemployment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the Board's annual OPEB cost for the year ended June 30, 2012, the amount actually contributed to the plan, and changes in the Board's net OPEB obligation: Annual required contribution $ 41,644,000 Interest on net OPEB obligation 6,322,000 Amortization of net OPEB obligation (5,939,000) Annual OPEB cost (expense) 42,027,000 Contributions made 24,556,886 Increase in net OPEB obligation 17,470,114 Net OPEB obligation - beginning of year 109,940,815 Net OPEB obligation - end of year $ 127,410,929 The Board's annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the year ended June 30, 2012 was as follows: Fiscal Year Annual Percentage of Annual OPEB Net OPEB Ended OPEB Cost Cost Contributed Obligation 6/30/12 $42,027,000 58.4% $127,410,929 Funded Status and Funding Progress As of July 1, 2011, the plan was 3.30 percent funded. The actuarial accrued liability for benefits was $462,698,000, and the actuarial value of assets was $15,255,626, resulting in an unfunded actuarial accrued liability (UAAL) of $447,442,374. The covered payroll (annual payroll of active employees covered by the plan) was $276,823,307, and the ratio of the UAAL to the covered payroll was 161.63 percent. NOTE 6 - POSTEMPLOYMENT BENEFITS OTHER THAN PENSION BENEFITS (continued) Actuarial valuations of an ongoing plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the 53
HARFORD COUNTY PUBLIC SCHOOLS NOTES TO FINANCIAL STATEMENTS June 30, 2012 employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multi-year trend information about whether the actuarial value of plan assets is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the 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 the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. Significant valuation methods and assumptions are as follows: Valuation Date July 1, 2011 Actuarial Cost Method Projected Unit Credit method Amortization Method Level percentage of projected pay over a 27-year period Asset Valuation Method Market value Actuarial Assumptions: Discount Rate 5.75% Investment Rate of Return 8.00% per year compounded annually Payroll Growth Rate 3.00% Inflation Rate 3.20% Healthcare Cost Trend Rates: Medical and prescription Dental 5.00% 8.00% initial year of valuation (not applicable to Life) 4.20% final year of valuation (not applicable to Life) The actuarial value of assets was determined using market value of assets. The trust is assumed to earn 8% interest and contributions are assumed to be made in the middle of the year. The unfunded liability was amortized over a closed period of 27 years using level percentage of pay for FY12. 54
Page 1 and 2:
Comprehensive Annual Financial Repo
Page 3 and 4:
Comprehensive Annual Financial Repo
Page 5 and 6: Harford County Public Schools Table
Page 7 and 8: Introductory Section Katerina Lomis
Page 9: Board of Education of Harford Count
Page 12 and 13: actual enrollment of 38,222 student
Page 14 and 15: Relevant financial policies Primary
Page 17 and 18: Financial Section Christian Moriart
Page 19 and 20: Our audit was conducted for the pur
Page 21 and 22: Harford County Public Schools Manag
Page 33 and 34: Harford County Public Schools Exhib
Page 39 and 40: Exhibit 7 Harford County Public Sch
Page 41 and 42: Exhibit 9 Harford County Public Sch
Page 43 and 44: HARFORD COUNTY PUBLIC SCHOOLS NOTES
Page 55: HARFORD COUNTY PUBLIC SCHOOLS NOTES
Page 63 and 64: Required Supplemental Information K
Page 65 and 66: Other Supplemental Information Kale
Page 67 and 68: Schedule B Harford County Public Sc
Page 69 and 70: Harford County Public Schools Sched
Page 71 and 72: Schedule E Harford County Public Sc
Page 73 and 74: Statistical Section This part of HC
Page 75 and 76: Table 2 Harford County Public Schoo
Page 83 and 84: Table 10 Harford County Public Scho
Page 89 and 90: Independent Public Accountants’ R
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