Page 67 - BAA CAFR 2017

BIRMINGHAM AIRPORT AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
BIRMINGHAM AIRPORT AUTHORITY
NOTES TO THE FINANCIAL STATEMENTS
NOTE 11 OTHER POST-EMPLOYMENT BENEFITS (CONTINUED)

Employees covered by benefit terms $529.75
Assumed 2017 Average Health
At June 30, 2017, the following employees were covered by the benefit terms:
Subsidy (Single employee):
Assumed Retiree Cost for Life $3.84 per $1,000 of coverage per year.
Insurance:
Active participants in valuation:
Assumed Participation:
156
Number 75% medical, 80% Life Insurance
Dependents:
Average age Not Covered 45.2
Average years of service* 8.0
Total payroll* $9,014,199
Average payroll $57,783
Retired participants:
Pre-retirement Health Care Cost Trend:
Number with Life Insurance 16
Health care trend measures the anticipated overall rate at which health plan costs are
Average age 67.4
expected to increase in future years. The rates shown below are “net” and are applied to
Total Life Insurance In Force $663,500
the net per capita costs shown above. The trend shown for a particular plan year is the
Average Life Insurance Amount 41,169
rate that must be applied to that year’s cost to yield the next year’s projected cost.
Number Eligible for Health Insurance Reimbursement Rate (%) 6
Year Ending
Average age 2018 8.00 62.7
*Estimated service of 8 years and salary of $57,800 applied to 46 participants.
2019 7.50
2020 7.00
2021
Actuarial Accrued Liability: 6.50
2022 6.00
2023
5.50
The Authority’s actuarial accrued total OPEB liability of $1,706,576 was measured
5.00
2024
as of June 30, 2017, and was determined by an actuarial valuation as of that date.
2025+ 4.50
The trend rate assumptions were developed using Segal’s internal guidelines, which are
Actuarial assumptions and actuarial cost method
established each year using data sources such as the 2017 Segal Health Trend Survey,
The accrued liability in the June 30, 2017 actuarial valuation was determined
internal client results, trends from other published surveys prepared by the S&P Dow
using the following actuarial assumptions and other inputs, applied to all periods
Jones Indices, consulting firms and brokers, and CPI statistics published by the Bureau
included in the measurement, unless otherwise specified:
of Labor Statistics.
Post-retirement Trend: 0%
Actuarial Cost Method: Entry Age Normal Actuarial Cost Method. Entry
Rationale for Assumptions: The information and analysis used in selecting each
Age is the age at the time the participant would
assumption that has a significant effect on this
have commenced employment if the plan had
actuarial valuation are shown in the Birmingham
always been in existence. Normal Cost and
Retirement and Relief System Experience Study
Actuarial Accrued Liability are calculated on an
Report for the five-year period ended June 30, 2015.
individual basis and are allocated by service, with
Based on the results of that study as well as
Normal Cost determined as if the current benefit
professional judgment, no additional demographic
accrual rate had always been in effect. Actuarial
changes are warranted at this time and will be
Liability is allocated by salary.
This is the first valuation for this plan.
Change in Assumptions: assessed again in the next five-year review. The
Birmingham Airport Authority participates in this
pension plan, and the demographic assumptions for
“General Employees” of that plan apply to the
Birmingham Airport Authority
Discount Rates: 3.58%
Mortality Rates:
39
39