A city does not choose to advance fund its OPEB plan but instead will continue to pay these postretirement benefits as they come due. The current year's benefit payments total $2,500. The total OPEB liability increased from $14,000 to $16,500 during the year. The General Fund would recognize an expenditure of

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Since the city has chosen not to advance fund its OPEB plan, it will only recognize an expenditure for the current year's benefit payments as they come due. Therefore, only the $2,500 of benefit payments made during the year would be recognized as an expenditure in the General Fund. The increase in the total OPEB liability from $14,000 to $16,500 would not be recognized as an expenditure in the General Fund.

A City Does Not Choose to Advance Fund Its OPEB