The Georgia Municipal Employee Benefit System (GMEBS) has created a trust that will help cities identify and establish the value of other (than pension) post-employment benefits (OPEB) liabilities and provide a mechanism to accept funds for pre-funding those obligations.
The Governmental Accounting Standards Board (GASB) adopted Statements 43 and 45 which require state and local governments to account for the value of OPEB liabilities accrued over an employee's working lifetime and for the values of those benefits to be recorded on the local government's audited financial statement. While Georgia cities are not required to pre-fund OPEB as they would pension obligations, there are benefits in doing so.
OPEB includes medical, prescription drug, dental, vision and life insurance.
The OPEB trust was created by the GMEBS Board of Trustees to assist cities that will have to define and disclose any post-employment benefits, other than pension benefits, they provide to former employees and retirees. The income of the OPEB Trust accrues to the participating employers and is tax exempt as provided for under Section 115(1) of the IRS Code.
Municipalities, municipal authorities and commissions and regional commissions are eligible to participate in the fund.
For an administrative fee, GMA will receive employer trust contributions, perform recordkeeping (including creation of a separate account for each employer), remit contributions to the custodian of the trust, invest employer contributions and disburse funds.
Participating entities may utilize actuarial services only, the trust only (make contributions to the trust to pre-fund the OPEB liability) or both.
GMEBS has contracted with an independent actuary to perform annual OPEB actuarial valuations and other actuarial services for participating entities that wish to utilize such services.
Members of the OPEB Trust are assessed administrative and investment management fees depending on which services they utilize. Pricing will also vary based on the size of the entity and whether or not the entity participates in the GMEBS Life and Health Insurance Fund.
To participate in the OPEB Trust, a resolution/ordinance and a participation agreement must be adopted.