Retiree Health Benefit Expense and Obligation for Retiree Health Benefits Beginning July 1, 2007, the University’s retiree health benefit expense is independently calculated for the campuses and medical centers and LBNL based upon the actuarially determined annual required contribution. The annual required contribution represents the level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize unfunded actuarial liabilities over a period of up to 30 years. The University’s annual retiree health benefit expense and related information for the year ended June 30, 2008, segregated between the University and DOE responsibility, is as follows: (in thousands of dollars)
Actuarial valuation date
CAMPUSES AND MEDICAL CENTERS LBNL UNIVERSITY OF CALIFORNIA
July 1, 2007
July 1, 2007
July 1, 2007
Annual required contribution $ 1,355,362 $ 44,426 Interest on obligations for retiree health benefits Adjustment to annual required contribution Annual retiree health benefit cost 1,355,362 44,426 University contributions: To UCRHBT (225,066 ) To healthcare insurers and administrators (10,548 ) Implicit subsidy (43,036 ) (2,384 ) Total contributions (268,102 ) (12,932 ) Increase in obligations for retiree health benefits 1,087,260 31,494 Obligations for retiree health benefits Beginning of year End of year $ 1,087,260 $ 31,494
$ 1,399,788
1,399,788 (225,066 ) (10,548 ) (45,420 ) (281,034 ) 1,118,754
$ 1,118,754
Retiree health care reimbursement by DOE during the year $ 10,548 $ 10,548 DOE receivable for obligations for retiree health benefits: Noncurrent Total
$ 31,494 $ 31,494
$ 31,494 $ 31,494
GASB Statement No. 45 was not applicable for the prior year and the cost of retiree health and welfare coverage was recognized when paid. The cost of retiree health and welfare benefits for the year ended June 30, 2007 was $215.9 million; $174.5 for campus and medical center retirees; $31.7 million for LLNL retirees; and $9.7 million for LBNL retirees. University payments directly to health care insurers and administrators under the University’s retiree health plans for retirees who previously worked at LLNL were $12.0 million for the period from July 1, 2007 through September 30, 2007, the date the University’s contract to manage and operate LLNL expired. The DOE reimbursed the University for these payments. As of June 30, 2008, the University has no remaining obligation for LLNL retiree health benefit costs.
103