What is the net OPEB obligation?
The net OPEB obligation (NOO) is based on the difference between the ARC and the amount actually contributed. The NOO is calculated annually and is based on the accumulated contributions and the accumulated ARC. At the end of a year, the NOO equals the summation of beginning of the year NOO and the annual OPEB cost, less the actual contribution made that year.
The net OPEB obligation (NOO) is based on the difference between the ARC and the amount actually contributed. The NOO is calculated annually and is based on the accumulated contributions and the accumulated ARC. At the end of a year, the NOO equals the summation of beginning of the year NOO and the annual OPEB cost, less the actual contribution made that year. If the accumulated contributions: • Equal the accumulated ARC, then NOO is zero (this would imply that the plan is being fully funded). • Are greater than the accumulated ARC, then NOO is less than zero (overfunded), creating an asset on the books of the government. • Are less than the accumulated ARC, then NOO is greater than zero (underfunded), creating a reportable liability for GASB 45 purposes.
