Key Benefit Concepts prepares valuations in two ways – as a roll back or a roll forward. Roll back refers to a valuation with a measurement date that is 12 months prior to the reporting date, whereas roll forward refers to a valuation with a measurement date the same as the reporting date. While preparing a valuation as a roll forward, there are certain pieces of information that are needed to complete the valuation that are not available until after the fiscal year end.
The additional information is based upon how our client funds its OPEB and/or Supplemental Pension benefits, whether it be through general assets or via an irrevocable trust. For example, if the organization is funding its benefits via an irrevocable trust, we will need information in regards to their Fund 73 transactions including:
- Benefit payments
- For OPEB these could include any payments made from the organization towards retiree’s health, dental, life and/or vision insurance (including Implicit Rate Subsidy – IRS) or payments towards a retiree’s HRA/HSA. For Stipend, this would include any type of retiree cash or stipend payments (i.e., 403(b), TSA etc.).
- Employer contributions
- This would include any amounts that the organization contributes to their trust to prefund their OPEB and/or Stipend benefits.
- Employee contributions
- This would include any amounts that the employee has to pay/contribute towards continued insurance coverage (health, dental, vision etc.) to remain on the organization’s plan that is being run through their trust.
- Net investment income
- This would include any interest or income earned on the organization’s assets being held in their trust (including any realized and unrealized gains/losses).
- Trust Administrative Expenses
- This would include any expenses or fees related to the organization’s trust fund.
- EOY trust balance as of the reporting date
- This is trust’s net position as of the reporting date, including any ‘due to’ or ‘due from’ amounts.
If the organization funds its benefits through general assets, we only need the total benefit payment amount. For OPEB these could include any payments made by the organization towards retiree’s health, dental, life and/or vision insurance (including Implicit Rate Subsidy – IRS) or payments towards a retiree’s HRA/HSA and for Stipend, this would include any type of retiree cash or stipend payments (i.e., 403(b), TSA etc.).
We ask that the roll forward information provided is broken out between OPEB and Pension benefits and provided based on contributions/payments over the fiscal year that the valuation encompasses.