Institutional Federal Compliance Report 2021

Annual OPEB Cost and Net OPEB Obligation Amounts “required” but not actually set aside to pay for these benefits are accumulated with interest as part of the net OPEB obligation, after adjusting for amounts previously “required.” The State’s annual OPEB cost for the year, the amount actually paid on behalf of the plan, and changes in the State’s net OPEB obligation to the plan for the year ended March 31, 2018 are as follows (amounts in millions): ____________________________________________________________________________________________ STATE OF NEW YORK • 117 Governmental Activities: Annual required contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,390 Interest on net OPEB obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 Adjustment to annual required contribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (562) Annual OPEB cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,284 Contributions made . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,575) Increase in OPEB obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,709 Net obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,302 Net obligation at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 20,011 Actuarial accrued liability (AAL) April 1, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 72,830 Funded OPEB plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —00000 Unfunded actuarial accrued liability (UAAL) April 1, 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 72,830 Funded ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —0 0 0 % Covered payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,676 UAAL as percentage of covered payroll . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 839.4% The annual required contribution (ARC) represents a level of funding that, if paid on an ongoing basis, is projected to cover normal costs each year and amortize any unfunded actuarial liabilities (or funding excess) of the plan over a period not to exceed thirty years.

In accordance with GASBS No. 45, Accounting and Financial Reporting by Employers for Postemployment Ben- efits Other Than Pensions , the actuarial valuation of OPEB also includes the value of sick leave that will be converted to reduce the retiree’s share of health insurance premiums.

The State’s annual OPEB cost, the percentage of annual OPEB cost contributed to the plan, and the net OPEB obligation for the three most recent fiscal years ended March 31 were as follows (amounts in millions):

Percentage of Annual

Annual OPEB Cost

Net OPEB Obligation

Fiscal Year Ended

OPEB Cost Paid

03/31/18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 03/31/17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 03/31/16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $

4,284 3,242 3,246

36.76% $ 44.63% $ 41.31% $

20,011 17,302 15,507

Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the plan and include the types of benefits provided at the time of each valuation. The actuarial methods and assumptions used include techniques that are designed to reduce short-term volatility in actuarial accrued liabilities and the actuarial value of assets, consistent with the long-term perspective of the calculations. The State’s $4.3 billion annual OPEB cost, deter- mined using the April 1, 2016 actuarial valuation with results projected to April 1, 2017 for the fiscal year ended March 31, 2018, was determined using the

frozen entry age actuarial cost method, allocating costs on a level percentage of earnings basis. The State’s $72.8 billion unfunded actuarial accrued liability was calculated in the April 1, 2016 actuarial valuation using the frozen entry age actuarial cost method, and was amortized over an open period of 30 years using the level percentage of projected payroll amortization method. Health care trends were split to reflect separate trends for claims before age 65 and claims after age 65, given that current stan- dards suggest post-65 claims grow at a smaller rate than do pre-65 claims. The pre-65 trend assumption begins at 6.75 percent and decreases to a 4.75 percent