Opeb Trust Agreement

6 LA GASB`s Statement 43 states that a trust or equivalent agreement is an agreement in which: 1) employer contributions are irrevocable; 2) Assets are intended for benefits to retirees and beneficiaries, in accordance with the provisions of the plan; 3) Assets are protected from the employer`s or plan administrator`s creditors. In collaboration with Wells Fargo Investment Advisor, the directors allocated funds with a number of index investments to keep management fees low, while covering the various areas identified as part of the overall strategy. An up-to-date summary sheet with trust managers and assignments is available online. (Note that Treuhand is migrating to active investments using a dollar cost method, with some endowments still in cash during this transition) The GFOA recommends that governments pre-finance their commitments for non-pension post-employment benefits (OPEB) as soon as they have found that the employer has taken on a significant long-term responsibility.1 In most cases, employers can make long-term investments to cover these commitments through a separate trust fund that, over time, should result in a reduction in the total cost of providing benefits after employment. The GFOA recommends the creation of a qualified trust fund for the pre-financing of OPEB`s commitments. To ensure that the Trust is properly established and managed, governments should consult with qualified legal advisors and fully understand the following issues: 4 An IRS decision letter responds to a request from plan sponsors to determine both the qualified status of its OPEB plan and the exempt status of its trust. The objective of the trust is to conduct annual actuarial studies and establish the trust and management of the pooled OPEB funds. SCAC has entered into an agreement with Gabriel, Roeder, Smith-Company, a nationally recognized insurance company with experience in GASB 45/OPEB requirements, to help counties determine their OPEB commitments. In addition, in June 2008, THE CCAC introduced a new trust agreement that will allow counties to pool their OPEB funds and invest in instruments that achieve the highest returns, as do public agencies. 3 Small plans generally allow investments in diversified investment funds, preferably in institutional equity classes (which have lower fees) or institutional trusts that are refined with each other. Large plans with sufficient portfolio balances can also include individual securities in their portfolios through separately managed accounts. The investment policy should also contain guidelines on employers` preferences for active and passive investment strategies.