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2012 CAFR
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2012 CAFR
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CITY OF ROSEVILLE <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2012 <br />NOTE 5 -OTHER INFORMATION (Continued) <br />E. Annual pension cost and net pension obligation (Continued) <br />Covered payroll is not an actuarial factor in determining benefits or funding obligations under applicable <br />Minnesota statutes. <br />NOTE 6 — OTHER POST - EMPLOYMENT BENEFITS <br />A. Plan Description <br />In addition to providing the pension benefits described in Note 5, the City provides post- employment health care <br />benefits (as defined in paragraph B) for retired employees and police and firefighters disabled in the line of duty, <br />through a single- employer defined benefit plan. The term Plan refers to the City's requirement by State Statute to <br />provide retirees with access to health insurance. The OPEB plan is administered by the City. The authority to <br />provide these benefits is established in Minnesota Statutes Sections 471.61 Subd. 2a, and 299A.465. The benefits, <br />benefit levels, employee contributions and employer contributions are governed by the City and can be amended <br />by the City through its personnel manual and collective bargaining agreements with employee groups. The Plan is <br />not accounted for as a trust fund, as an irrevocable trust has not been established to account for the plan. The Plan <br />does not issue a separate financial report. <br />B. Benefits Provided <br />p Ptireeq <br />The City is required by State Statute to allow retirees to continue participation in the City's group health <br />insurance plan if the individual terminates service with the City through service retirement or disability <br />retirement. Employees who satisfy the rule of 90 or attain age 55 and have completed 10 years of service <br />at termination can immediately commence medical benefits. Retirees may obtain dependent coverage <br />while the participating retiree is under age 65. Covered spouses may continue coverage after the retiree's <br />death. The surviving spouse of an active employee may continue coverage in the group health insurance <br />plan after the employee's death. <br />All health care coverage is provided through the City's group health insurance plans. The retiree is <br />required to pay 100% of their premium cost for the City- sponsored group health insurance plan in which <br />they participate. The premium is a blended rate determined on the entire active and retiree population. <br />Since the projected claims costs for retirees exceed the blended premium paid by retirees, the retirees are <br />receiving an implicit rate subsidy (benefit). The coverage levels are the same as those afforded to active <br />employees. Upon a retiree reaching age 65 years of age, Medicare becomes the primary insurer and the <br />City's plan becomes secondary. <br />72 <br />
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