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OPEB as of June 30, 2025 GASB 74 75 - FY25 Report
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APPENDIX II – PLAN PROVISIONS
Plan Year July 1 through June 30.
Premium Effective Date Medicare Supplement Plans: effective January 1, 2025
Active Plans: effective July 1, 2025
Dental Plans: effective July 1, 2025
Creditable Service Elapsed time from date of hire to termination of service date.
Benefits Offered Comprehensive Medical, Dental, and $5,000 of Life Insurance.
Medicare Part A To the best of our knowledge the Town does not pay any Medicare Part A premiums or
penalties.
Medicare Part B Medicare Part B Premium reimbursements by the Town were not reflected in this
valuation.
Medicare Part B Penalty reimbursements have been reflected.
Surviving Spouse Coverage Spousal benefits do not change after the death of a plan participant.
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 31Source page 42
APPENDIX II – PLAN PROVISIONS
Eligibility
Hire Date Eligibility
•Age 55 with 10 years of creditable service
Before April 2, 2012
•20 years of service regardless of age
On or after April 2, 2012 •Age 60 with 10 years of creditable service
Participant Contributions
Group Individual Two-Person / Family
Medical 25% 25%
Dental 25% 25%
Life 25% N/A
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 32Source page 43
APPENDIX III – ACTUARIAL METHODS & ASSUMPTIONS
Pre-Retirement Mortality General: RP-2014 Mortality Table for Blue Collar Employees projected generationally
with scale MP-2021, set forward 1 year for females
Teachers: PubT-2010 Mortality Table (Headcount-weighted) for Employees projected
generationally with scale MP-2021
Post-Retirement Mortality General: RP-2014 Mortality Table for Blue Collar Healthy Annuitants projected
generationally with scale MP-2021, set forward 1 year for females
Teachers: PubT-2010 Mortality Table (Headcount-weighted) for Healthy Annuitants
projected generationally with scale MP-2021
Disabled Mortality General: RP-2014 Mortality Table for Blue Collar Healthy Annuitants projected
generationally with scale MP-2021, set forward 1 year for males and 2 years for females
Teachers: PubT-2010 Mortality Table (Headcount-Weighted) for Healthy Annuitants
projected generationally with scale MP-2021
Assumption Experience Study The actuarial assumptions used to calculate the actuarial accrued liability and the
service cost primarily reflect the latest experience studies of the Massachusetts PERAC
issued in 2014 and their most recent analysis of retiree mortality during 2015 and 2016.
Discount Rate 6.43% per annum (previously 6.66%)
Net Long Term Rate of Return 6.51% (based on investment policy)
Municipal Bond Rate 4.81% as of June 30, 2025 (source: S&P Municipal Bond 20-Year High Grade Index –
SAPIHG)
Actuarial Cost Method Individual Entry Age Normal
Asset-Valuation Method Market Value of Assets as of the Measurement Date, June 30, 2025
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 33Source page 44
APPENDIX III – ACTUARIAL METHODS & ASSUMPTIONS
Employee Termination It was assumed that employees would terminate employment in accordance with the
sample rates shown in the following table:
Non-Public Safety Employees
Service Male Female
0 15.00% 15.00%
5 7.60% 7.60%
10 5.40% 5.40%
15 3.30% 3.30%
20 2.00% 2.00%
Public Safety Employees
Service Male Female
0 9.00% 9.00%
5 6.00% 6.00%
10 3.50% 3.50%
15 2.00% 2.00%
20 1.50% 1.50%
25 1.50% 1.50%
30 1.50% 1.50%
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 34Source page 45
APPENDIX III – ACTUARIAL METHODS & ASSUMPTIONS
Retirement Rates for Eligible Employees
Standard Standard Male Female Public
Age Male Female Teachers Teachers Safety
45 - 49 0.00% 0.00% 0.00% 0.00% 6.00%
50 - 51 3.00% 3.00% 2.00% 1.50% 6.00%
52 3.00% 3.00% 2.00% 1.50% 6.00%
53 3.00% 3.00% 2.00% 1.50% 7.50%
54 3.00% 3.50% 2.00% 2.00% 15.00%
55 3.50% 5.00% 6.00% 5.00% 25.00%
56 3.50% 5.00% 20.00% 15.00% 15.00%
57 4.00% 5.50% 40.00% 35.00% 15.00%
58 5.00% 6.00% 50.00% 35.00% 15.00%
59 6.00% 6.50% 50.00% 35.00% 15.00%
60 9.00% 7.50% 40.00% 35.00% 20.00%
61 11.00% 10.00% 40.00% 35.00% 20.00%
62 15.00% 15.00% 35.00% 35.00% 20.00%
63 15.00% 15.00% 35.00% 35.00% 20.00%
64 16.00% 15.00% 35.00% 35.00% 30.00%
65 20.00% 20.00% 35.00% 35.00% 50.00%
66 20.00% 20.00% 40.00% 35.00% 25.00%
67 20.00% 20.00% 40.00% 30.00% 25.00%
68 20.00% 20.00% 40.00% 30.00% 25.00%
69 20.00% 20.00% 40.00% 30.00% 25.00%
70 100.00% 100.00% 100.00% 100.00% 100.00%
71 100.00% 100.00% 100.00% 100.00% 100.00%
72 100.00% 100.00% 100.00% 100.00% 100.00%
Permanent Disability Rates
Public
Age Standard Teachers Safety
20 0.01% 0.05% 0.20%
30 0.01% 0.07% 0.21%
40 0.07% 0.21% 0.71%
50 0.13% 0.42% 1.10%
60 0.12% 0.50% 0.80%
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 35Source page 46
APPENDIX III – ACTUARIAL METHODS & ASSUMPTIONS
Trend Rate Medicare Part A & B Premiums & Penalties: Assumed to rise at the same rates as our
Medical Plan trend assumption.
Medical & Dental Plans: Rates were developed using the SOA Getzen Model of Long-
Run Medical Cost Trends with the following model input variables:
Inflation (CPI): 2.50%
Real GDP (per capita): 1.10%
Excess Medical Cost Growth: 1.10%
Expected Health Share of GDP in 2030: 21%
Health Share of GDP Resistance Point: 22.5%
Year for Limiting Cost Growth to GDP Growth: 2060
See below for a table of trend rates for select years:
Year Rate
2021 9.00%
2022 8.00%
2023 6.50%
2024 5.00%
2025 4.96%
2026 4.92%
2027 4.88%
2028 4.84%
2029 4.81%
2030 - 2037 4.77%
2050 4.38%
2060+ 3.63%
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 36Source page 47
APPENDIX III – ACTUARIAL METHODS & ASSUMPTIONS
Participation Rate It was assumed that 80% of employees eligible to receive retirement benefits would
enroll in the retiree medical and dental plans upon retirement. For life insurance plans,
it was assumed that 80% of eligible employees would elect coverage upon retirement.
Spouse Participation Rate It was assumed that 80% of male employees and 70% of female employees who elect
retiree healthcare coverage for themselves would also elect coverage for a spouse upon
retirement.
Medicare Eligibility It was assumed that retirees who were over age 66 on the valuation date and were
enrolled in an Active plan were ineligible for Medicare and all other participants would
be eligible for Medicare at age 65, absent any information to the contrary.
Compensation Increases 3.00% per year.
Inflation Rate 2.50% per year.
COVID–19 We recognize that COVID–19 may impact plan experience. We have reviewed the
assumptions used in this report. Based on the data that is currently available, we have
not made any adjustments to these assumptions to reflect the impact of COVID–19. We
will continue to monitor the impact of COVID–19 to determine if adjustments to
valuation assumptions are warranted.
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 37Source page 48
APPENDIX III – ACTUARIAL METHODS & ASSUMPTIONS
Implicit Subsidy
The implicit subsidy arises because retirees who are not eligible for Medicare are charged the same premium as active
employees, even though their actual medical costs are higher on average. Consequently, a portion of the premiums being
paid for active employees are being used to “subsidize” the premiums of retirees. Actuarial Standards of Practice and
GASB standards require the liability associated with this implicit subsidy to be valued. The chart below shows a
breakdown of how implicit cost impacts reported cash flows and liabilities. Actuarial Standard of Practice No. 6 (“ASOP
6”) requires us to recognize this implicit subsidy while the plan sponsor may only pay the premiums billed by an
insurance provider.
Impact of Implicit Subsidy
As of the Measurement Date
Impact on Liability June 30, 2025 June 30, 2024
I. Total OPEB Liability 99,295,855 100,093,241
II. Total OPEB Liability (Excluding Implicit Subsidy) 77,994,636 77,331,057
III. Liability from Implicit Subsidy [I. - II.] 21,301,219 22,762,184
For the Measurement Period Ending
Impact on Payments June 30, 2025 June 30, 2024
IV. Employer Payments (Including Implicit Subsidy) 4,632,854 4,209,663
V. Actual Employer Payments 3,536,900 3,251,904
VI. Implicit Subsidy [IV. - V.] 1,095,954 957,759
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 38Source page 49
APPENDIX III – ACTUARIAL METHODS & ASSUMPTIONS
Pre-65 and post-65 per capita costs were developed using fully insured premium rates.
ANNUAL PER CAPITA CLAIMS*
RETIREE - NOT MEDICARE RETIREE - MEDICARE
ACTIVE EMPLOYEES ELIGIBLE ELIGIBLE
Age Bracket Female Male Age Bracket Female Male Age Bracket Female Male
24 & Under 5,137 3,239 44 & Under 10,098 6,617 65 to 69 3,401 3,492
25 to 29 7,580 3,370 45 to 49 11,092 8,355 70 to 74 4,011 4,185
30 to 34 9,578 4,230 50 to 54 13,049 11,003 75 to 79 4,654 4,941
35 to 39 9,867 5,310 55 to 59 15,085 14,306 80 to 84 5,338 5,680
40 to 44 10,098 6,617 60 to 64 17,950 18,357 85 to 89 5,967 6,327
45 to 49 11,092 8,355 65 to 69 21,517 22,898 90 & Over 5,967 6,327
50 to 54 13,049 11,003 70 to 74 25,374 27,440
55 to 59 15,085 14,306 75 to 79 29,469 32,409
60 to 64 17,950 18,357 80 to 84 33,788 37,251
65 to 69 21,517 22,898 85 to 89 38,568 42,639
70 & Over 25,374 27,440 90 & Over 38,568 42,639
*Based on SOA 'Health Care Costs--From Birth to Death' study published in 2013
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 39Source page 50
APPENDIX III – ACTUARIAL METHODS & ASSUMPTIONS
Open Group Forecast For the projection of plan liabilities in future years, it was assumed that the number of
active employees will remain constant and those who terminate employment or retire
will be replaced with new employees with the demographics below:
Open Group Forecast Population
Demographics
Age Male Female
20 8.0% 5.0%
30 7.0% 14.0%
40 20.0% 19.0%
50 10.0% 10.0%
60 3.0% 4.0%
Total 48.0% 52.0%
Additional Comments The liabilities being reported as of the Measurement Date of June 30, 2025 reflect a
closed group and do not reflect any new entrants after the valuation date.
To the best of our knowledge all employees who are eligible on the valuation date are
included in the actuarial valuation.
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 40Source page 51
APPENDIX IV – PLAN DEMOGRAPHICS
Plan Demographics
Active Employees
Valuation Date July 1, 2024 July 1, 2022
A. Average Age at Hire 34.47 34.64
B. Average Service 10.20 10.37
C. Average Current Age 44.67 45.01
Retired Employees & Spouses
Valuation Date July 1, 2024 July 1, 2022
A. Under Age 65 116 117
B. Age 65 & Over 510 513
C. Total 626 630
Average Service Age
Years of Service
Age 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40+ Total
0-24 39 2 41
25-29 63 10 4 77
30-34 51 16 8 3 78
35-39 45 21 15 7 88
40-44 27 26 13 21 3 90
45-49 31 13 9 24 22 5 104
50-54 24 28 15 28 14 16 2 127
55-59 16 9 6 10 12 16 7 2 78
60-64 13 8 2 8 14 7 5 3 60
65-69 4 4 3 2 2 15
70+ 2 1 1 3 1 1 9
Total 315 138 75 102 70 45 14 7 1 767
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 41Source page 52
APPENDIX IV – PLAN DEMOGRAPHICS
Plan Offerings Number of Contracts
Single Two-Person Family Total
HMO Blue 187 0 291 478
Blue Care Elect 48 0 80 128
Medex 201 155 0 356
Total 436 155 371 962
Per Contract Costs (monthly)
Single Two-Person Family
HMO Blue 871.46 0.00 2,290.54
Blue Care Elect 1,343.22 0.00 3,186.47
Medex 392.45 784.90
Delta Dental Basic 23.32 67.77
Delta Dental Enhanced 41.72 121.24
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 42Source page 53
APPENDIX IV – PLAN DEMOGRAPHICS
Active Plan Average Premium Calculation
Number of Total Premiums Claims Without
Single Two-Person Family Participants Paid Children
HMO Blue 187 0 291 769 9,954,121.92 8,041,832.88
Blue Care Elect 48 0 80 208 3,832,705.92 3,352,677.12
Total 235 0 371 977 13,786,827.84 11,394,510.00
Blended Average Monthly Rate: $ 971.90
Medicare Supplement Plan Average Premium Calculation
Number of Total Premiums Claims Without
Single Two-Person Family Participants Paid Children
Medex 201 155 0 511 2,406,503.40 2,406,503.40
Total 201 155 0 511 2,406,503.40 2,406,503.40
Blended Average Monthly Rate: $ 392.45
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 43Source page 54
APPENDIX V – OVERVIEW OF GASB 74 & 75 Before Statements 74 and 75, GASB statement 45 established the reporting standards for Other Postemployment Benefit (“OPEB”) plans. It was designed to recognize the Other Postemployment Benefits earned by employees throughout their working career vs. when they are paid in retirement – accrual accounting vs. “pay-as-you-go” accounting. Additionally, each eligible active employee earns benefits each year representing benefits to be paid in retirement or a “Service Cost”. These amounts are reflected in your financial statement each year so that OPEB benefits for an eligible employee shall be fully charged to the financial statement when that eligible employee terminates employment. In 2012 GASB issued GASB Statements 67 and 68 to update and standardize the financial reporting of pension liabilities. This increased the transparency of pension liabilities by moving them to the balance sheet and made financial statement disclosures of pension liabilities more comparable between municipal entities. GASB Statements 74 and 75 are designed to have the same effect on OPEB plans. GASB 74 and 75 require retiree medical plans to disclose information about asset and liability levels and show historical contribution information. GASB 74 only applies in situations where a separate trust is established to prefund these benefits. GASB 75 requires employers to perform periodic actuarial valuations to determine annual accounting costs and to keep a running tally of the extent to which these amounts are over or under funded. GASB 74 and 75 apply to those benefits provided after retirement, except for pension benefits, such as medical, dental and life insurance. The philosophy behind the accounting standard is that these postemployment benefits are part of the compensation earned by employees in return for their services, and the cost of these benefits should be recognized while employees are providing those services, rather than after they have retired. This philosophy has already been applied for years to defined benefit pensions; GASB 74 and 75 extend this practice to all other postemployment benefits. Town of Canton Other Postemployment Benefits Plan For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 44
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APPENDIX V – OVERVIEW OF GASB 74 & 75
The process of determining the liability for OPEB benefits is based on many assumptions about future events. The key actuarial
assumptions are:
Turnover and retirement rates – How likely is it that an employee will qualify for postemployment benefits and when will they start?
Medical inflation and claims cost assumptions – When an employee starts receiving postemployment benefits many years from now,
how much will be paid each year for the benefits and how rapidly will the costs grow?
Mortality assumption – How long is a retiree likely to receive benefits?
Discount rate assumption – What is the present value of those future benefit payments in terms of today’s dollars?
Since the liability is being recognized over the employee’s whole career with the Town, the present value is divided into three pieces:
the part that is attributed to past years (the “Total OPEB Liability” or “Past Service Liability”), the part that is being earned this year
(the “Service Cost”), and the part that will be earned in future years (the “Future Service Liability”).
Once the Accrued Liability and the Service Cost have been calculated, the next step is to determine an actuarially determined
contribution. This is an amount that if paid annually would fully prefund the benefits for current active and retired employees. This
consists of two pieces:
✓ Service Cost – because the benefits earned by active employees each year should be paid for each year
✓ Past Service Cost – a catch-up payment to fund the Accrued Liability over a period of time determined by an actuary
The final step is to keep track going forward of how much of the contribution is actually paid. There is no requirement to actually fund
these benefits, but the cumulative deficiency must be disclosed on the Town’s financial statements as the Net OPEB Liability (NOL). If
you decide to fully fund the NOL this will appear in the financial statement as a Net OPEB Asset. In addition, the Discount Rate used
to calculate the liabilities must reflect the expected investment income of whatever funds are set aside to prefund the benefits; if there is
no prefunding then the Discount Rate will be much lower and the liabilities significantly higher than if the benefits are prefunded.
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 45Source page 56
APPENDIX VI – ASOP 41 DISCLOSURES The Actuarial Standards Board (the “ASB”), vested by the U.S.-based actuarial organizations1, promulgates actuarial standards of practice (“ASOPs”) for use by actuaries when providing professional services in the United States. Each of these organizations requires its members, through its Code of Professional Conduct2, to observe the ASOPs of the ASB when practicing in the United States. The ASOPs are not narrowly prescriptive and neither dictate a single approach nor mandate a particular outcome. ASOPs are intended to provide actuaries with a framework for performing professional assignments and to offer guidance on relevant issues, recommended practices, documentation, and disclosure. Each ASOP articulates a process of analysis, documentation, and disclosure that, in the ASB’s judgment, constitutes appropriate practice within the scope and purpose of the ASOP. ASOP 41 provides guidance to actuaries with respect to actuarial communications and requires certain disclosures which are contained in this Appendix. Identification of the Responsible Actuary The responsible actuary is Parker Elmore, ASA, EA, FCA, MAAA of Odyssey Advisors. This actuary is available to provide supplementary information and explanation. Identification of Actuarial Documents The date of this document is September 15, 2025 and its subject is the Town of Canton's GASB 75 OPEB liabilities. 1 The American Academy of Actuaries (the “Academy”), the American Society of Pension Professionals and Actuaries, the Casualty Actuarial Society, the Conference of Consulting Actuaries, and the Society of Actuaries. 2 These organizations adopted identical Codes of Professional Conduct effective January 1, 2001 Town of Canton Other Postemployment Benefits Plan For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 46
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APPENDIX VI – ASOP 41 DISCLOSURES
Disclosures in Actuarial Reports
✓ The contents of this report are intended for the use of the officers, employees, and elected officials of the Town and the Town’s
appointed auditor. The Town may distribute this report to those parties that have a legal right to require the Town to provide it,
in which case it will be provided in its entirety including all assumptions, caveats, and limitations. In addition, we request that
the Town notify Odyssey Advisors to whom it was distributed.
✓ The purpose of this engagement was to provide the Town with analysis of the GASB 75 OPEB liabilities.
✓ The responsible actuary identified above is qualified as specified in the Qualification Standards of the American Academy
of Actuaries.
✓ Actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into
the future. Actuarially determined amounts are subject to continual revision as actual results are compared to past expectations
and new estimates are made about the future.
✓ Actuarial computations under GASB 75 are for purposes of fulfilling financial accounting requirements of the Town.
Determinations for purposes other than meeting these financial accounting requirements may be significantly different from the
results contained in this report. These communications should not be relied upon for any other purpose.
✓ The Town of Canton has agreed to pay Odyssey Advisors a fee for preparing this report. Other than with regard to that contract,
we are financially and organizationally independent from the Town and any entity or individual related to the Town. There is
nothing in our relationship with the Town that would impair or seem to impair the objectivity of our work.
✓ The Town provided the employee/retiree data, premium rates and other information used to prepare our report. We have
reviewed the data for reasonableness but have not audited it. To the extent that there are material inaccuracies in the data, our
results may be accordingly affected.
✓ The date through which data or other information has been considered in developing the findings included in this report is June
30, 2025.
✓ The various documents comprising the actuarial report are contained within the document to which these disclosures
are attached.
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 47Source page 58
APPENDIX VI – ASOP 41 DISCLOSURES Events Subsequent to the Measurement Date To the best of our knowledge there were no material events subsequent to the Measurement Date that would impact the figures shown in this report. Actuarial Findings The actuarial findings of the report can be found in the report to which these disclosures are attached. Methods, Procedures, Assumptions, and Data The methods, procedures, assumptions and data used by the actuary can be found in the report to which these disclosures are attached. Assumptions or Methods Prescribed by Law While not legally binding, our determinations were made in accordance with our understanding of Statement No. 75 of the Governmental Accounting Standards Board. Actuarial computations under GASB 75 are for purposes of fulfilling employer accounting requirements. Determinations for purposes other than meeting such requirements may be significantly different from these results. Accordingly, additional determinations may be needed for other purposes. Responsibility for Assumptions and Methods The actuary does not disclaim responsibility for any material assumption(s) or method(s). Deviation from the Guidance of an ASOP The actuary has not deviated materially from the guidance set forth in an applicable ASOP. Rounding Results in this report are shown to the nearest dollar. Due to the predictive nature of these results, no implication is made as to the degree of precision in these unrounded figures. Clients should work with their auditors to decide if it would be prudent to round these results when applying them to the financial statements. Town of Canton Other Postemployment Benefits Plan For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 48
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GLOSSARY Accrual Accounting – A system of accounting in which revenues are recorded when earned and outlays are recorded when goods are received or services performed, even though the actual receipt of revenues and payment for goods or services may occur, in whole or in part, at a different time. Actuarially Determined Contribution – Amount of funding required annually to fully fund plan benefits. Determined by the actuary using a consistent methodology. Amortization – Allows the recognition of liability over a fixed period of time. Cash Basis Accounting – A system of accounting in which revenues are recorded when received and outlays are recorded when payment is made. Deferred Inflows/Outflows of Resources – Amounts arising from experience gains and losses that have not been recognized into the OPEB Expense but will be recognized in the future. Discount Rate – The interest rate used to calculate the present value of future cash flows. Under GASB 75, the rate should be the expected long-term rate of return on investments for a plan that is being fully funded, the 20-year municipal bond index for a pay-as- you-go plan, and a blend of the two rates for a plan that is being partially funded. Entry Age Normal – Under this method, the annual service cost for each individual active member, payable from the date of employment to the date of retirement, is sufficient to accumulate the value of the member’s benefit at the time of retirement. The annual service cost for each active member is a level percent of payroll. The total OPEB liability is the actuarial present value of the projected benefit times the ratio of past service to expected total service at retirement/termination. Fiduciary Net Position – The value of cash, investments, other assets and property belonging to an OPEB trust. Town of Canton Other Postemployment Benefits Plan For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 49
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GLOSSARY Governmental Accounting Standards Board (GASB) – “The Governmental Accounting Standards Board (GASB) was organized in 1984 by the Financial Accounting Foundation (FAF) to establish standards of financial accounting and reporting for state and local governmental entities. Its standards guide the preparation of external financial reports of those entities.” Implicit Subsidy – The liability that arises because retirees who are not eligible for Medicare are charged the same premium as active employees even though their actual medical costs are higher on average. Irrevocable Contribution – The transfer of assets to a qualified trust in which assets may only be withdrawn for the purpose of providing retiree other postemployment benefits. Net OPEB Liability (NOL) – Total OPEB Liability less the Fiduciary Net Position. Other Postemployment Benefits (OPEB) – Benefits that an employee will begin to receive at the start of retirement. This does not include pension benefits paid to the retired employee. OPEB Trust – An entity which holds assets for the sole purpose of funding OPEB. All contributions and earning within this entity must be irrevocable and protected from creditors. Pay-as-you-go funding – Paying benefits (such as pensions or OPEB) on a cash basis, with no money set aside for future liabilities which are already incurred. Service Cost – The actuarially determined present value contribution needed to fund benefits which are earned for employee service rendered during the current year. Service cost depends on many factors, including the interest rate used to discount future cashflows, and expected inflation. Total OPEB Liability (TOL) – That portion, as determined by the Individual Entry Age Normal Actuarial Cost Method, of the Actuarial Present Value of benefits and expenses which are not provided for by future Service Costs. Town of Canton Other Postemployment Benefits Plan For the Fiscal Year ending June 30, 2025 | Delivered September 15, 2025 Page 50