7.17 Other Post-Employment Benefits Funding Policy
(Last Modified on June 5, 2017)
The purpose of this Funding Policy is to state the intent for accumulation of reserve funding for the Other Post-Employment Benefits (OPEB) liability of the Board of Regents Health Benefit Plan. The Board of Regents establishes this Funding Policy to help ensure the systematic funding of future benefit payments for members of the Board of Regents Health Benefit Plan. The plan’s OPEB liability - the actuarially calculated liability for retiree benefits - is a significant liability that will increase absent control strategies such as advance funding. Therefore, it is the intent of the Board of Regents of the University System of Georgia that the Funding Policy outlined herein be implemented and remain unchanged unless changed by subsequent board action.
- To achieve long-term funding of the cost of benefits provided by the Board of Regents Health Benefit Plan;
- To seek reasonable and equitable allocation of the cost of benefits over time;
- To minimize volatility of employer contributions to the extent reasonably possible, consistent with other policy goals; and
- To maintain a policy that is both transparent and accountable to the stakeholders of the Board of Regents Health Benefit Plan.
Organizational units of the University System of Georgia pay the employer portion for group insurance for eligible retirees. The employer portion of the health insurance for its eligible retirees and retiree premium rate is based on the rates that are established annually by the Board of Regents for the upcoming plan year. With regard to life insurance, the employer covers the total costs for $25,000 basic life insurance.
Assets are to accumulate under the guidelines described in the Reserve Funding Levels and OPEB Trust Fund Allocation Section, so that investment income can be earned on assets not needed to pay current year retiree health benefit payments.
Any reserve funds in the Board of Regents Health Benefit plan remaining after allowing for the plan’s Incurred But Not Reported (IBNR) liability plus twenty (20%) percent of plan benefit claims expense, be transferred to the OPEB Trust Fund annually, upon completion of the financial audit. Additional one-time contributions may be made on a discretionary basis in connection with derisking and other objectives upon approval of the Board of Regents.
On an annual basis the University System of Georgia, Fiscal Affairs will report to the Board of Regents the amounts accumulated in the OPEB Trust Fund. The policy should be periodically reviewed in conjunction with the most recent version of the “Report of the Actuary on the Retiree Medical Valuations” that has been submitted to the Board of Regents, and any revisions to governmental accounting standards or statutory changes.
(BoR Minutes, May 2017)↑ Top