{"id":858,"date":"2011-08-15T16:16:11","date_gmt":"2011-08-15T21:16:11","guid":{"rendered":"http:\/\/pensionblog.com\/?p=858"},"modified":"2011-08-15T16:16:11","modified_gmt":"2011-08-15T21:16:11","slug":"measure-it-before-you-promise-it-for-gasb-45-opeb","status":"publish","type":"post","link":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/","title":{"rendered":"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB"},"content":{"rendered":"

\"\"<\/a>Over the past several years, GASB 45 has required public employers to recognize the cost of Other Postemployment Benefits (OPEB: e.g., retiree health insurance, life insurance) while employees are accruing the benefits, not after they retire. For many public entities, the true cost of their healthcare promises has been an eye opener.<\/p>\n

However, public employers (especially local entities) should remember that GASB-type calculations are valuable in the \u201coff-season\u201d too. This post discusses one of the biggest missed opportunities for cost-saving: Measuring the cost impact of changes to retiree OPEB before<\/span><\/strong> contracts are signed.<\/p>\n

In the corporate world, it is almost unheard of for employers to adjust their retiree benefit promises without first measuring the cost impact. This is especially true of collectively-bargained pension and retiree health plans. Both sides hire an actuary to estimate the cost of these benefits and bring their numbers to the table.<\/p>\n

However, many local public entities may not be used to this process yet. During the biennial GASB 45 valuation process, we still encounter contractual changes to retiree benefits that occurred after the prior actuarial study but were not reported to us in the interim. There are two main problems with this approach:<\/p>\n

    \n
  1. It\u2019s not prudent to make or change benefit promises without estimating the cost impact.<\/strong> Suppose an employer is renegotiating a contract and there is a proposal to change the retiree health benefit from \u201cfully-paid single premiums until age 65\u201d to \u201cfully-paid family premiums for up to 5 years\u201d. Is this a cost increase or decrease? There\u2019s no way to know unless you measure the cost beforehand.<\/li>\n<\/ol>\n
      \n
    1. GASB 45 requires<\/span> a full actuarial valuation if there is a significant change in benefit promises. <\/strong>\u00a0As we discussed in a previous post, public employers shouldn\u2019t wait until the next scheduled actuarial study (2 or 3 years, depending on plan size) to reflect significant plan changes in their financial statements.<\/li>\n<\/ol>\n

      As public employers get acquainted with valuing the actuarial cost of their OPEB benefits for GASB 45 financials, they should embrace the philosophy of \u201cmeasure it before you promise it\u201d for any changes to these benefits. Public sector OPEB are becoming front page news and administrators must proceed cautiously when adjusting benefits or making new promises.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Over the past several years, GASB 45 has required public employers to recognize the cost of Other Postemployment Benefits (OPEB: e.g., retiree health insurance, life insurance) while employees are accruing the benefits, not after they retire. For many public entities, the true cost of their healthcare promises has been an eye opener. However, public employers […]Read More… from \u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[13,16,17],"tags":[78,15,79,18,19],"acf":[],"yoast_head":"\n\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB - Via Actuarial Solutions<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB - Via Actuarial Solutions\" \/>\n<meta property=\"og:description\" content=\"Over the past several years, GASB 45 has required public employers to recognize the cost of Other Postemployment Benefits (OPEB: e.g., retiree health insurance, life insurance) while employees are accruing the benefits, not after they retire. For many public entities, the true cost of their healthcare promises has been an eye opener. However, public employers [...]Read More... from \u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB\" \/>\n<meta property=\"og:url\" content=\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/\" \/>\n<meta property=\"og:site_name\" content=\"Via Actuarial Solutions\" \/>\n<meta property=\"article:published_time\" content=\"2011-08-15T21:16:11+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg\" \/>\n<meta name=\"author\" content=\"Mark Schulte\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Mark Schulte\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"2 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/\"},\"author\":{\"name\":\"Mark Schulte\",\"@id\":\"https:\/\/viaactuarial.com\/#\/schema\/person\/550e0b60004ae77e0fab0d97fbbf8f24\"},\"headline\":\"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB\",\"datePublished\":\"2011-08-15T21:16:11+00:00\",\"dateModified\":\"2011-08-15T21:16:11+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/\"},\"wordCount\":375,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/viaactuarial.com\/#organization\"},\"image\":{\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg\",\"keywords\":[\"GASB 45\",\"OPEB\",\"public pensions\",\"retiree health\",\"retiree medical\"],\"articleSection\":[\"GASB 45\",\"Other post-employment benefits (OPEB)\",\"Public plans\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/\",\"url\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/\",\"name\":\"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB - Via Actuarial Solutions\",\"isPartOf\":{\"@id\":\"https:\/\/viaactuarial.com\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg\",\"datePublished\":\"2011-08-15T21:16:11+00:00\",\"dateModified\":\"2011-08-15T21:16:11+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#primaryimage\",\"url\":\"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg\",\"contentUrl\":\"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/viaactuarial.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/viaactuarial.com\/#website\",\"url\":\"https:\/\/viaactuarial.com\/\",\"name\":\"Via Actuarial Solutions\",\"description\":\"\",\"publisher\":{\"@id\":\"https:\/\/viaactuarial.com\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/viaactuarial.com\/?s={search_term_string}\"},\"query-input\":\"required name=search_term_string\"}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/viaactuarial.com\/#organization\",\"name\":\"Via Actuarial Solutions\",\"url\":\"https:\/\/viaactuarial.com\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/viaactuarial.com\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/viaactuarial.com\/wp-content\/uploads\/2023\/02\/logo2.png\",\"contentUrl\":\"https:\/\/viaactuarial.com\/wp-content\/uploads\/2023\/02\/logo2.png\",\"width\":365,\"height\":108,\"caption\":\"Via Actuarial Solutions\"},\"image\":{\"@id\":\"https:\/\/viaactuarial.com\/#\/schema\/logo\/image\/\"}},{\"@type\":\"Person\",\"@id\":\"https:\/\/viaactuarial.com\/#\/schema\/person\/550e0b60004ae77e0fab0d97fbbf8f24\",\"name\":\"Mark Schulte\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/viaactuarial.com\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/892b31127de66ce91181ca69f00109b1?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/892b31127de66ce91181ca69f00109b1?s=96&d=mm&r=g\",\"caption\":\"Mark Schulte\"},\"url\":\"https:\/\/viaactuarial.com\/author\/schultemw\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB - Via Actuarial Solutions","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/","og_locale":"en_US","og_type":"article","og_title":"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB - Via Actuarial Solutions","og_description":"Over the past several years, GASB 45 has required public employers to recognize the cost of Other Postemployment Benefits (OPEB: e.g., retiree health insurance, life insurance) while employees are accruing the benefits, not after they retire. For many public entities, the true cost of their healthcare promises has been an eye opener. However, public employers [...]Read More... from \u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB","og_url":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/","og_site_name":"Via Actuarial Solutions","article_published_time":"2011-08-15T21:16:11+00:00","og_image":[{"url":"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg"}],"author":"Mark Schulte","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Mark Schulte","Est. reading time":"2 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#article","isPartOf":{"@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/"},"author":{"name":"Mark Schulte","@id":"https:\/\/viaactuarial.com\/#\/schema\/person\/550e0b60004ae77e0fab0d97fbbf8f24"},"headline":"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB","datePublished":"2011-08-15T21:16:11+00:00","dateModified":"2011-08-15T21:16:11+00:00","mainEntityOfPage":{"@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/"},"wordCount":375,"commentCount":0,"publisher":{"@id":"https:\/\/viaactuarial.com\/#organization"},"image":{"@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#primaryimage"},"thumbnailUrl":"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg","keywords":["GASB 45","OPEB","public pensions","retiree health","retiree medical"],"articleSection":["GASB 45","Other post-employment benefits (OPEB)","Public plans"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/","url":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/","name":"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB - Via Actuarial Solutions","isPartOf":{"@id":"https:\/\/viaactuarial.com\/#website"},"primaryImageOfPage":{"@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#primaryimage"},"image":{"@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#primaryimage"},"thumbnailUrl":"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg","datePublished":"2011-08-15T21:16:11+00:00","dateModified":"2011-08-15T21:16:11+00:00","breadcrumb":{"@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#primaryimage","url":"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg","contentUrl":"https:\/\/vaniwaarden.com\/wp-content\/uploads\/2011\/08\/contract-image.jpeg"},{"@type":"BreadcrumbList","@id":"https:\/\/viaactuarial.com\/2011\/08\/15\/measure-it-before-you-promise-it-for-gasb-45-opeb\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/viaactuarial.com\/"},{"@type":"ListItem","position":2,"name":"\u201cMeasure It Before You Promise It\u201d for GASB 45 OPEB"}]},{"@type":"WebSite","@id":"https:\/\/viaactuarial.com\/#website","url":"https:\/\/viaactuarial.com\/","name":"Via Actuarial Solutions","description":"","publisher":{"@id":"https:\/\/viaactuarial.com\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/viaactuarial.com\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/viaactuarial.com\/#organization","name":"Via Actuarial Solutions","url":"https:\/\/viaactuarial.com\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/viaactuarial.com\/#\/schema\/logo\/image\/","url":"https:\/\/viaactuarial.com\/wp-content\/uploads\/2023\/02\/logo2.png","contentUrl":"https:\/\/viaactuarial.com\/wp-content\/uploads\/2023\/02\/logo2.png","width":365,"height":108,"caption":"Via Actuarial Solutions"},"image":{"@id":"https:\/\/viaactuarial.com\/#\/schema\/logo\/image\/"}},{"@type":"Person","@id":"https:\/\/viaactuarial.com\/#\/schema\/person\/550e0b60004ae77e0fab0d97fbbf8f24","name":"Mark Schulte","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/viaactuarial.com\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/892b31127de66ce91181ca69f00109b1?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/892b31127de66ce91181ca69f00109b1?s=96&d=mm&r=g","caption":"Mark Schulte"},"url":"https:\/\/viaactuarial.com\/author\/schultemw\/"}]}},"_links":{"self":[{"href":"https:\/\/viaactuarial.com\/wp-json\/wp\/v2\/posts\/858"}],"collection":[{"href":"https:\/\/viaactuarial.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/viaactuarial.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/viaactuarial.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/viaactuarial.com\/wp-json\/wp\/v2\/comments?post=858"}],"version-history":[{"count":0,"href":"https:\/\/viaactuarial.com\/wp-json\/wp\/v2\/posts\/858\/revisions"}],"wp:attachment":[{"href":"https:\/\/viaactuarial.com\/wp-json\/wp\/v2\/media?parent=858"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/viaactuarial.com\/wp-json\/wp\/v2\/categories?post=858"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/viaactuarial.com\/wp-json\/wp\/v2\/tags?post=858"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}