The Florida League of Cities OPEB Trust
The Florida Municipal Pension Trust Fund (FMPTF), administered by the Florida League of Cities, has created an innovative OPEB Trust that simplifies the process of administering your municipality's other post employment benefits (OPEB) plan. The process of joining the new OPEB Trust is as easy as 1-2-3. Whether you choose to fund your OPEB liability over a number of years, or to fund the entire liability up-front, the League's straightforward approach will provide a simplified method to manage your OPEB liability. In addition, fees for the new OPEB Trust's administration are significantly lower than attempting to secure each service separately on your own.
Many state and local government employers provide OPEB to retirees in addition to pension benefits. OPEB takes the form of retiree health insurance, dental, vision, prescription drug or other healthcare benefits. Until now, the cost of these benefits generally has been reported on a pay-as-you-go basis. Governmental Accounting Standards Board (GASB) Statement No. 45 establishes new standards for the recording of OPEB expense and the liabilities in the financial reports of state and local government employers. Employers must account for and report the annual cost of OPEB in the same way they report pensions.
GASB 45 will have a significant financial impact on the budgets of local governments that provide post-employment benefits. Even those governmental entities that think they have no liability may be affected. In Florida, state statutes require that the employer make health coverage available to retirees at the employer's group rate. This creates an implicit cost that could potentially make this a financial issue for every city in Florida.