This amount is the normal cost for the fiscal period, computed in a similar manner to normal pension cost, plus any amortization el the UAAL (or funding excess.
A net OPEB obligation is arrived at, which is the cumulative difference between annual costs, including the UAAL (or asset) and contributions.
In fact, catching up with the UAAL
could more than double employer contributions--big money added to town and city and school budgets if nothing is done.
Exhibit 2 shows the five states with the lowest UAAL per capita in the 2009-2011 time frame.
Exhibit I: Assets, Liabilities, and Annual Required Contributions for All States, 2009-2011 * State Name Date of Unfunded UAAL Report Liability Per Unfunded (in millions) Capita Alabama 2010 4,053 860.
is the excess of the actuarial accrued liability as determined under the plan's actuarial cost method over the plan's actuarial value of assets.
Fourteen states have a UAAL under $1,500 per capita, Morningstar's threshold for "Good" unfunded liability levels.
Twenty states have a UAAL above $3,000 per capita; Alaska has the highest UAAL per capita, currently more than $10,000.
Thus, the true economics of a POB transaction are subject to market fluctuations - a risk which increases with a POB transaction since it results in a lump-sum investment to cover the UAAL
rather than averaging the investment through annual contributions.
Fitch views positively the parish's recent actions to reduce the UAAL
which include limiting eligibility and reducing the parish's premium contributions.
Fitch notes that staffing reductions and changes to health care benefits have reduced the OPEB UAAL
dramatically from the $306 million recorded in the previous actuarial study.