Other than the establishment of an irrevocable trust or reserve fund, what option does a local government have to fund their OPEB liabilities?
While making annual payments towards annual OPEB costs is the simplest method in the short run, the “pay-as-you-go” method will result in annually increasing NOO for GASB 45 reporting purposes as the ARC likely exceeds the current PAYGO amount. In addition, as greater numbers of employees retire, the PAYGO amount will exceed the ARC initially calculated in the not-too-distant future.
