Five Benefits to Prefunding Your OPEB Now

The GASB1 Statement No. 75 (effective for fiscal years beginning after June 15, 2017) will increase liabilities and expense volatility on many public employers’ financial statements. By moving from pay-as-you-go to setting funds aside in an IRS-approved, GASB-compliant trust, you may be able to:

     1.  Minimize OPEB2 liabilities reported
     2.  Invest for higher potential returns to outpace healthcare inflation
     3.  Reduce annual costs of paying benefits over time
     4.  Access funds at any time to pay for retiree OPEB benefits
     5.  Demonstrate to creditors you are proactively addressing the growing liabilities

PFM’s Asset Management team has established a multi-employer trust ready for public employers to join, or can assist with customizing your very own single-employer trust. As of March 31, 2017, we manage or advise $118 billion in total assets, of which $3.4 billion is managed for 59 OPEB clients.

To learn more about the benefits of prefunding an OPEB Trust, which is considered a best practice by the GFOA3, contact your PFM Asset Management representative today. 
1GASB refers to the Governmental Accounting Standards Board
2OPEB refers to other post-employment benefits
3GFOA refers to the Government Finance Officers Association;

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