At December 31, 2020, a city had $8 million in its General Fund that the city council had assigned to pay for OPEB retiree healthcare benefits. Its total OPEB liability at that time was $12 million. For the year ended December 31, 2020, it had paid $1 million in retiree healthcare costs. The city's salaries for the year were $20 million. What was the city's funded ratio?

Question

Quizplus · Accepted Answer

The formula for the funded ratio is:
 11ee3ffc_f3a8_fa0a_93d2_af8ce79abdcd_TBCB1000_00 The answer is 0%. The reason is that the city had no assets set aside in an OPEB plan that meet the GASB requirements. The city council had only assigned $8 million of the General Fund's fund balance to pay for the benefits.

At December 31, 2020, a City Had $8 Million in Its