BEST PRACTICES: OPEB Governance and Administration Flashcards
Sponsoring governments should establish a clear, well-documented governance structure to guide governing bodies and plan administrators.
What is the primary recommendation of GFOA for sponsoring governments of OPEB plans?
To establish a clear, well-documented governance structure for guiding governing bodies and plan administrators.
What should the governance structure clearly delineate?
The governance responsibilities of fiduciaries and plan administrators in a comprehensive manual and appropriate plan and trust documents.
Why is it important to keep plan documents current and reflective of the substantive plan?
To avoid legal issues regarding variations between the substantive plan and the official plan documents.
What is the purpose of a summary plan description provided to participants?
To describe plan benefits, vesting period, and the plan’s significant features, and to conduct periodic educational sessions for review.
What records are essential for the administration of the plan?
Participant and beneficiary names, demographic information, hire dates, and birth dates.
What should be included in the comprehensive policy and procedures manual?
Current plan documents, IRS determinations, administrative interpretations and decisions, and policies and procedures regarding governance, administration, compliance, and training.
What is the role of an actuary in OPEB plan administration?
To perform periodic valuations, determine the financial impact of proposed changes, and assess the validity of assumptions.
How can administrative costs be kept as low as possible?
By periodically reviewing contractual services, conducting eligibility and death audits, combining administrative activities, and implementing training and procedures to protect participant data.
What should be considered when there is flexibility in setting up the plan’s governing body?
The structure, experience required from members, size of the governing body, and rules expected of members such as ethics requirements and fiduciary duties.
