Title
RESOLUTION AUTHORIZING A LETTER OF UNDERSTANDING WITH THE STATE BOARD OF INVESTMENT ESTABLISHING A SEPARATELY MANAGED OTHER POST-EMPLOYMENT BENEFITS (OPEB) ACCOUNT FOR THE CITY OF DULUTH
Body
CITY PROPOSAL:
WHEREAS, the City has an existing OPEB account administered by the Public Employees Retirement Association and invested with the Minnesota State Board of Investment (SBI); and
WHEREAS, the City is currently limited to the investment options provided by the SBI; and
WHEREAS, the City has accumulated a significant balance in its OPEB account; and
WHEREAS, the City has brought forward an Ordinance establishing an OPEB funding framework; and
WHEREAS, the establishment of the separately managed OPEB account is a key factor in establishing a viable and sustainable OPEB funding structure,
NOW, THEREFORE, BE IT RESOLVED, that the City and SBI enter into an agreement, substantially in the form that is attached, establishing a Duluth OPEB sub-account which will hold a portfolio of securities, managed by the SBI, that are structured to match the City's specific retiree insurance cash flow needs.
Statement of Purpose
STATEMENT OF PURPOSE: This resolution authorizes proper city officials to enter into an agreement with the Minnesota State Board of Investment (SBI) to establish a separately managed other post-employment benefits (OPEB) account for the City of Duluth. This separately managed account will enable the SBI to manage a portfolio of investments specifically structured for the City of Duluth that will be tailored to meet projected retiree insurance cash flow needs.
This agreement is directly related to a proposed Ordinance establishing an OPEB funding framework that uses both annual appropriations and the OPEB trust fund to pay the cost of retiree insurance premiums. The SBI, through this agreement, is providing investment flexibility to the City that currently does not exist. This investment flexibility is needed to move forward with th...
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