Fund Balances of Governmental Funds

Union Public Schools Notes to the Financial Statements

FOR THE YEAR ENDED JUNE 30, 2021

NOTE G -EMPLOYEE RETIREMENT SYSTEM

Discount Rate: The discount rate used to measure the total pension liability was 7.00%. This single discount rate was based solely on the expected rate of return on pension plan investments of 7.00%. The projection of cash flows used to determine this single discount rate assumed that plan members and employer contributions will be made at the current statutory levels and remain a level percentage of payroll. The projection of cash flows also assumed that the State’s contribution plus the matching contributions will remain a constant percent of projected member payroll based on the past five years of actual contributions. Based on the stated assumptions and the projection of cash flows, OTRS' fiduciary net position and future contributions were projected to be available to finance all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate: The following table presents the net pension liability of the District calculated using the discount rate of 7.00%, as well as what the District's net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower (6.00%) or 1-percentage-point higher (8.00%) than the current rate:

Net pension liability $ 200,650,430 $ 150,338,227 $ 108,687,496

Pension plan fiduciary net position: Detailed information about the pension plan’s fiduciary net position is available in the separately issued financial report of the OTRS; which can be located at www.ok.gov/TRS.

NOTE H -OTHER POST-EMPLOYMENT INSURANCE BENEFITS-HEALTH AND DENTAL INSURANCE PROGRAM

Plan description: District employees have the option under a single-employer plan of continuing health, vision, and dental coverage at their own expense upon retirement under the Oklahoma Teachers Retirement System if they are covered by an employment contract that provides for post-retirement benefits and who meet one of the following requirements:

 Age 55 or older with 5 years of service

 Rule of 80 if hired before July 1, 1992 (combined age and service years)

 Rule of 90 if hired after July 1, 1992 (combined age and service years)

 10 years of service and terminating employment

Retired employees may pay the same premium as the District pays for current employees. The plan is administered by the District and the District has the authority to establish or amend the plan provisions or contribution requirements. No assets are accumulated in a trust that meets the criteria in paragraph 4 of Statement No. 75. The plan does not issue a stand-alone financial report.

Benefits provided: The District provides healthcare, dental, and vision benefits for retirees and their dependents.

Contributions: Contribution requirements of the District are established and may be amended by the Board of Education. All contributions are made by the retirees. Benefits are funded under a "pay as you go" funding method; however expenses are recorded as benefits accumulate.

1% Decrease (6.00)% Current Discount Rate (7.00)% 1% Increase (8.00)%

Union Public Schools Notes to the Financial Statements

FOR THE YEAR ENDED JUNE 30, 2021

NOTE H -OTHER POST-EMPLOYMENT INSURANCE BENEFITS-HEALTH AND DENTAL INSURANCE PROGRAM

The following employees were covered by the benefit terms at June 30, 2021:

Active employees electing coverage Actives waiving coverage Retirees electing coverage Total 1,586 252 390 2,228

Total OPEB liability: The District’s total OPEB liability of $6,772,189 was measured as of June 30, 2021, and was determined by an actuarial valuation as of that date.

Actuarial methods and assumptions: The total OPEB liability in the June 30, 2021 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified:

 Discount rate of 2.45%

 Inflation rate of 2.50%

 Mortality - Rates are from the Pub-2010 headcount weighted mortality tables for Teachers projected generational using scale MP-2019.

 Health care cost trend rate - 6.4% for FY2020, gradually decreasing over several decades to an ultimate rate of 4.0% in FY2076 and later years.

 The discount rate was based on the Fidelity 20-Year Municipal GO AA Index.

Total OPEB Liability (a) Plan Fiduciary Net Position (b) Net OPEB Liability (a) - (b)

Balance for fiscal year ending 6/30/2019* $ 6,251,250 $ - $ 6,251,250

Changes for the year:

Service cost

Interest

Changes of assumptions

Employer contributions

Benefit payments Net changes 390,665 - 390,665

201,247 - 201,247

353,645

- 353,645 - 424,618 (424,618) (424,618) (424,618) -

520,939 - 520,939

Balance for fiscal year ending 6/30/20* $ 6,772,189 $ - $ 6,772,189

*The District has elected to use the GASB 75 "lookback" method where assets and liabilities are measured as of the prior fiscal year-end, but applied to the current fiscal year.

The total OPEB liability at June 30, 2021 is included in the government-wide statement of net position as a non-current obligation.