OPEB – A Checklist for Your Next Valuation

Bottom Line Up Front

• When it’s time for your OPEB valuation, your actuary will send you a list of information they need from you, which may include employee and retiree demographics, data on your plan benefits, financial statement, and OPEB Trust (if applicable).
• This article provides a simple explanation of why your actuary may be asking for certain items.
• Download the checklist we send our clients for full and interim valuations below. 

Article updated as of September 20, 2022

We’ve spent a lot of time covering what an OPEB valuation is, how often you need one, and what GASB 75 is, but how does this magical report come to be in the first place? Whether you’re new to the process or you just need a quick refresher to reference along with a simple explanation of why your actuary may be asking for these items (we promise it’s not because we’re nosy) – this article is for you. 

If you are new, the Governmental Accounting Standards Board (GASB) requires municipal organizations to value their Total OPEB Liability (TOL) at least every two years – those over 100 participants require a formal valuation performed by an actuary. Many of you are GASB pros at this point, but here is a quick overview of what your actuary needs from you to conduct your municipality’s OPEB valuation. 

Demographic Information/Census Data

1. List of all employees and retirees who are eligible for benefits 
   
2. Birthdates for all participants
   
3. Employee hire dates
   
4. Allocation groups
   • While not required, many of our clients like to see their liabilities broken down by different groups (town, school, water enterprise, etc.)
   • If you would like your Actuary to do this make sure to include which group each participant belongs to.
   • Even if you don’t need it broken down, your Actuary may ask you to indicate which participants are teachers or public safety since these groups tend to exhibit different behaviors than the general population (different rates of retirement)
     
5. Covered Payroll
   • While this has no impact on OPEB liabilities, it is a required disclosure.
     
6. Common Identifier (optional, but helpful)
   • Not required but common identifiers such as social security numbers or a unique employee number are extremely helpful. It allows your Actuary to match the new data to the data you may have provided for the previous population. This allows us and your auditors to better understand how the population changes from year to year.  

Benefit Information 

7. What benefits do you provide?
   • If you’re using the same Actuary you have in the past, they may already be familiar with your plan, but it’s important to alert them to any recent changes.
     
8. Updated premiums and penalties (if applicable)
   
9. Differences in cost-sharing and benefits
   • If different participants pay different % of premiums or receive different benefits, please indicate that. 
   • If benefits vary based on the retirement date, please provide retirement dates as well.
     
10. Prior valuation
    • If you used a different Actuary for your prior valuation, please provide the previous valuation report.

OPEB Trust Information

11. Copy of your OPEB Trust statement 
    • As of the Measurement Date (likely your fiscal year-end if subject to GASB accounting), your Actuary may ask for a statement that details individual holdings.
    • If you’re not sure what your Actuary is looking for, with your permission they may be able to contact your Trust provider on your behalf.
      
12. Your funding policy
    • We highly encourage adopting a formal funding policy. 
    • In the absence of a funding policy, your Actuary may ask how much you anticipate contributing each year or they may ask to see your contributions for the last 5 years so they can estimate a funding policy for you. 
      
13. Dates and amounts of any contributions made to your Trust during the current fiscal year
    
14. Your investment policy 
    • If you don’t have a formal investment policy that breaks out the weighting by different asset types, your Actuary will likely ask for a detailed trust statement to determine how you are invested or they may want to talk directly with your investment provider. 
      
15. Your General Ledger
    • Your Actuary will look to confirm that your General Ledger matches your trust statements and if not they will want to know why (e.g., was there a receivable?)

Financial Statement Information

16. Financial statement from the prior fiscal year
    
17. Auditor name and contact information
    • While this may not be needed for every valuation,  your Actuary may want to speak with your Auditor to make sure that their report aligns with the financial statement and meets your Auditor’s needs. 

Clear Communication of Needs and Concerns

If you have difficulty getting a piece of data or answering a question, you should reach out to your Actuary so they can help. Also, if there are specific items you need in the report (e.g., per person service cost by function) make sure to let your Actuary know so they can ensure that their report meets your needs. 

BONUS: Here are the checklists we send to our clients for both full and interim valuations

• Interim Valuation Checklist
• Full Valuation Checklist

OPEB valuations and data collection, in particular, can be daunting. That list is large enough to make anyone feel overwhelmed. We hope that this post can help provide some clarity and help you understand why your Actuary keeps asking for your Auditor’s contact information and a photo of your dog, Marley (just kidding on that last part – sort of. We love dogs!). 

These are the same checklists we send to our clients for their full valuations and interim valuations. Your Actuary’s job is to guide you through the process so make sure to keep them in the loop and always feel free to reach out to us if you have any questions.