Briefing on pensions and other post-employment employee benefits. [Diana Thomas, Deputy Chief Financial Officer, Austin Financial Services].

Summary

This is a briefing on the City of Austin's pension systems (COAERS, APRS, AFRF) and Other Post-Employment Benefits (OPEB). Recent legislative reforms (2021-2025) have aimed to improve funding levels and amortization periods for these systems. Key changes include establishing Actuarially Determined Contribution models, setting legacy liabilities on payment plans, modifying board compositions, and restricting benefit enhancement powers. These reforms have positively impacted the City's bond rating, with Fitch restoring it to AAA after the AFRF legislation. The OPEB liability has significantly decreased from $3.2 billion to $1.3 billion due to retirees over 65 being required to enroll in a Medicare Advantage plan starting January 1, 2025, and an increase in the discount rate.

Citizen Impact

These updates on pension and post-employment benefits are primarily administrative and financial matters that do not directly impact residents' daily services or taxes, but contribute to the city's long-term financial health and bond rating.

Confidence

high