BEST PRACTICES: Ensuring Other Postemployment Benefits (OPEB) Sustainability Flashcards
Governments should ensure OPEB sustainability by evaluating key items specifically related to OPEB, including the structure of benefits offered, the associated benefit cost-drivers, and clear communication to stakeholders.
What does GFOA recommend for ensuring OPEB sustainability?
Evaluating key items specifically related to OPEB, including the structure of benefits offered, the associated benefit cost-drivers, and clear communication to stakeholders.
What are the advantages of prefunding OPEB rather than pay-as-you-go funding?
Prefunding offers significant advantages in terms of equity and sustainability.
What should be formalized through a specific funding policy for postemployment benefits?
The financing of other postemployment benefits as they are earned (prefunding).
What is one cost control measure that can help ensure OPEB sustainability?
Implementing health-care cost containment measures.
How can governments control OPEB costs in relation to Medicare benefits?
Improve coordination with Medicare benefits, such as adjusting OPEB benefits for retirees eligible for Medicare or offering benefits only to those not eligible for Medicare.
What strategy is advised against in funding OPEB liabilities?
Issuing OPEB bonds to fund liabilities.
What should a government consider to manage the costs of benefits offered?
Developing vesting rules based on years of service and establishing eligibility rules that avoid including otherwise insured retirees, dependents, and spouses.
How can trust funds contribute to OPEB sustainability?
By creating a qualified trust fund to prefund OPEB obligations.
What is a crucial element in communicating OPEB decisions to stakeholders?
Considering OPEB as an integral part of an employee’s total compensation package and avoiding benefit reductions that place an undue burden on employees.
What subsidy options can governments consider to partially offset the cost of retiree health-care premiums?
Offering a fixed subsidy or a service-based subsidy that is not affected by increases in health-care costs.
