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OPEB as of June 30, 2024 - GASB 74 75 FY24
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APPENDIX I – LIABILITIES, ASSETS, & CASH FLOWS
BENEFIT PAYMENT PROJECTION DISCLOSURES (CONTINUED)
Table 3: Actuarial Present Values of Projected Benefit Payments using a July 1, 2022 Valuation Date
V. Present Value of VI. Present Value of
II. Benefit IV. Unfunded Funded Benefit Unfunded Benefit VII. Present Value of
For the Period Ending I. Beginning Fiduciary Payments for III. Funded Portion Portion of Benefit Payments using the Payments using the Benefit Payments using
on the Measurement Net Position for Current Current Plan of Benefit Payments Long-Term Rate of Municipal Bond Rate the Single Equivalent
Date Plan Members Members Payments [II. - III.] Return [6.83%] [4.21%] Discount Rate [6.66%]
June 30, 2064 148,640,563 8,226,194 8,226,194 0 585,423 0 624,099
June 30, 2065 149,306,922 8,015,166 8,015,166 0 533,937 0 570,122
June 30, 2066 149,261,647 7,791,017 7,791,017 0 485,824 0 519,578
June 30, 2067 148,402,598 7,572,553 7,572,553 0 442,011 0 473,479
June 30, 2068 146,614,719 7,359,334 7,359,334 0 402,102 0 431,418
June 30, 2069 143,777,334 7,185,609 7,185,609 0 367,509 0 394,934
June 30, 2070 139,809,797 7,004,150 7,004,150 0 335,326 0 360,926
June 30, 2071 134,600,925 6,753,420 6,753,420 0 302,651 0 326,278
June 30, 2072 128,014,683 6,548,825 6,548,825 0 274,719 0 296,639
June 30, 2073 119,958,166 6,333,570 6,333,570 0 248,703 0 268,977
June 30, 2074 110,300,717 6,124,989 6,124,989 0 225,135 0 243,878
June 30, 2075 98,874,311 5,891,738 5,891,738 0 202,716 0 219,944
June 30, 2076 85,522,739 5,658,742 5,658,742 0 182,252 0 198,057
June 30, 2077 70,068,843 5,422,964 5,422,964 0 163,492 0 177,954
June 30, 2078 52,330,709 5,193,680 5,193,680 0 146,569 0 159,790
June 30, 2079 32,107,958 4,960,811 4,960,811 0 131,046 0 143,096
June 30, 2080 9,172,759 4,715,823 4,715,823 0 116,610 0 127,536
June 30, 2081 0 4,471,200 0 4,471,200 0 426,321 113,371
June 30, 2082 0 4,224,198 0 4,224,198 0 386,501 100,421
June 30, 2083 0 3,981,620 0 3,981,620 0 349,590 88,744
June 30, 2084 0 3,735,803 0 3,735,803 0 314,758 78,067
June 30, 2085 0 3,481,281 0 3,481,281 0 281,465 68,206
June 30, 2086 0 3,235,564 0 3,235,564 0 251,032 59,434
June 30, 2087 0 2,987,670 0 2,987,670 0 222,436 51,454
June 30, 2088 0 2,744,886 0 2,744,886 0 196,106 44,321
June 30, 2089 0 2,506,517 0 2,506,517 0 171,842 37,945
June 30, 2090 0 2,274,314 0 2,274,314 0 149,624 32,280
June 30, 2091 0 2,055,601 0 2,055,601 0 129,773 27,355
June 30, 2092 0 1,842,068 0 1,842,068 0 111,595 22,983
June 30, 2093 0 1,638,896 0 1,638,896 0 95,276 19,171
June 30, 2094 0 1,446,700 0 1,446,700 0 80,706 15,866
June 30, 2095 0 1,266,054 0 1,266,054 0 67,775 13,018
June 30, 2096 0 1,097,483 0 1,097,483 0 56,378 10,580
June 30, 2097 0 941,619 0 941,619 0 46,417 8,511
June 30, 2098 0 798,893 0 798,893 0 37,791 6,770
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2024 | Delivered October 28, 2024 Page 30Source page 42
APPENDIX II – PLAN PROVISIONS
Plan Year July 1 through June 30.
Premium Effective Date Medicare Supplement Plans: effective January 1, 2023
Active Plans: effective July 1, 2023
Dental Plans: effective July 1, 2023
Creditable Service Elapsed time from date of hire to termination of service date.
Benefits Offered Comprehensive Medical and Dental Insurance and $5,000 of group term 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, 2024 | Delivered October 28, 2024 Page 31Source page 43
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, 2024 | Delivered October 28, 2024 Page 32Source page 44
APPENDIX III – ACTUARIAL METHODS & ASSUMPTIONS
Pre-Retirement Mortality General: RP-2014 Mortality Table for Blue Collar Employees projected generationally
with scale MP-2016, set forward 1 year for females
Teachers: RP-2014 Mortality Table for White Collar Employees projected generationally
with scale MP-2016
Post-Retirement Mortality General: RP-2014 Mortality Table for Blue Collar Healthy Annuitants projected
generationally with scale MP-2016, set forward 1 year for females
Teachers: RP-2014 Mortality Table for White Collar Healthy Annuitants projected
generationally with scale MP-2016
Disabled Mortality General: RP-2014 Mortality Table for Blue Collar Healthy Annuitants projected
generationally with scale MP-2016, set forward 1 year
Teachers: RP-2014 Mortality Table for White Collar Healthy Annuitants projected
generationally with scale MP-2016
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 6.66% per annum (previously 5.87%)
Net Long Term Rate of Return 6.83% (based on investment policy)
Municipal Bond Rate 4.21% as of June 30, 2024 (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, 2024
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2024 | Delivered October 28, 2024 Page 33Source page 45
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, 2024 | Delivered October 28, 2024 Page 34Source page 46
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, 2024 | Delivered October 28, 2024 Page 35Source page 47
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, 2024 | Delivered October 28, 2024 Page 36Source page 48
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, 2024 | Delivered October 28, 2024 Page 37Source page 49
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, 2024 June 30, 2023
I. Total OPEB Liability 100,093,241 104,622,382
II. Total OPEB Liability (Excluding Implicit Subsidy) 77,331,057 81,480,596
III. Liability from Implicit Subsidy [I. - II.] 22,762,184 23,141,786
For the Measurement Period Ending
Impact on Payments June 30, 2024 June 30, 2023
IV. Employer Payments (Including Implicit Subsidy) 4,209,663 4,297,460
V. Actual Employer Payments 3,251,904 3,315,150
VI. Implicit Subsidy [IV. - V.] 957,759 982,310
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2024 | Delivered October 28, 2024 Page 38Source page 50
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 4,821 3,039 44 & Under 9,477 6,209 65 to 69 2,916 2,994
25 to 29 7,113 3,163 45 to 49 10,409 7,841 70 to 74 3,440 3,588
30 to 34 8,988 3,969 50 to 54 12,245 10,326 75 to 79 3,990 4,237
35 to 39 9,259 4,984 55 to 59 14,156 13,424 80 to 84 4,577 4,870
40 to 44 9,477 6,209 60 to 64 16,844 17,227 85 to 89 5,116 5,425
45 to 49 10,409 7,841 65 to 69 20,193 21,488 90 & Over 5,116 5,425
50 to 54 12,245 10,326 70 to 74 23,812 25,751
55 to 59 14,156 13,424 75 to 79 27,654 30,413
60 to 64 16,844 17,227 80 to 84 31,706 34,957
65 to 69 20,193 21,488 85 to 89 36,193 40,014
70 & Over 23,812 25,751 90 & Over 36,193 40,014
*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, 2024 | Delivered October 28, 2024 Page 39Source page 51
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, 2024 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, 2024 | Delivered October 28, 2024 Page 40Source page 52
APPENDIX IV – PLAN DEMOGRAPHICS
Plan Demographics
Active Employees
Valuation Date July 1, 2022
A. Average Age at Hire 34.64
B. Average Service 10.37
C. Average Current Age 45.01
Retired Employees & Spouses
Valuation Date July 1, 2022
A. Under Age 65 117
B. Age 65 & Over 513
C. Total 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 33 2 35
25-29 54 12 2 68
30-34 41 19 5 1 66
35-39 35 30 17 5 1 88
40-44 25 21 21 12 6 85
45-49 35 14 20 24 19 2 114
50-54 27 14 21 16 21 17 1 117
55-59 16 8 11 12 18 11 8 1 85
60-64 8 10 9 6 9 5 4 51
65-69 3 2 4 5 1 2 1 1 19
70+ 1 1 2 1 5
Total 278 133 110 83 75 36 15 2 1 733
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2024 | Delivered October 28, 2024 Page 41Source page 53
APPENDIX IV – PLAN DEMOGRAPHICS
Plan Offerings Number of Contracts
Single Two-Person Family Total
HMO Blue 187 0 292 479
Blue Care Elect 46 0 74 120
Medex 181 165 0 346
Total 414 165 366 945
Per Contract Costs (monthly)
Single Two-Person Family
HMO Blue 846.08 0.00 2,223.83
Blue Care Elect 1,304.10 0.00 3,093.66
Medex 341.26 682.52
Delta Dental Basic 23.10 78.54
Delta Dental Enhanced 35.30 127.34
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2024 | Delivered October 28, 2024 Page 42Source page 54
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 0 292 771 9,690,903.84 7,827,932.16
Blue Care Elect 46 0 74 194 3,467,033.28 3,035,944.80
Total 233 0 366 965 13,157,937.12 10,863,876.96
Blended Average Monthly Rate: $ 938.16
Medicare Supplement Plan Average Premium Calculation
Number of Total Premiums Claims Without
Single Two-Person Family Participants Paid Children
Medex 181 165 0 511 2,092,606.32 2,092,606.32
Total 181 165 0 511 2,092,606.32 2,092,606.32
Blended Average Monthly Rate: $ 341.26
Town of Canton Other Postemployment Benefits Plan
For the Fiscal Year ending June 30, 2024 | Delivered October 28, 2024 Page 43Source page 55
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, 2024 | Delivered October 28, 2024 Page 44
Source page 56
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, 2024 | Delivered October 28, 2024 Page 45Source page 57
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 October 28, 2024 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, 2024 | Delivered October 28, 2024 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, 2024.
✓ 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, 2024 | Delivered October 28, 2024 Page 47Source page 59
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, 2024 | Delivered October 28, 2024 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, 2024 | Delivered October 28, 2024 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, 2024 | Delivered October 28, 2024 Page 50