Page 112 - 2018 Comprehensive Annual Financial Report - City of Winston-Salem

Funding Policy. Article 12E of G.S. Chapter 143 requires the City to contribute each month an amount equal to 5% of each
o cer’s salary, and all amounts contributed are vested immediately. Also, the law enforcement o cers may make
voluntary contributions to the plan. City contributions for the year ended June 30, 2018 were $1,486,895.

c. Winston-Salem General and Fire Employees’ De ned Contribution Retirement Plan
Plan Description. Winston-Salem General and Fire Employee’s De ned Contribution Plan is a de ned contribution plan
e ective January 1, 2017. The de ned contribution plan is permitted under the North Carolina State Statutes 160A-163
that allows municipalities to provide voluntary supplemental retirement plans.
Funding Policy. The City shall contribute 2% of each participant’s compensation to the 401(a) plan for each payroll period
during which such participant is duly employed by the City and is an employee, as de ned in Section 50-201 of the City
code. Contributions for the year ended June 30, 2018 were $1,811,229. A trust agreement has been adopted to hold the
assets of the 401(a) plan for employer contributions.

B. Other Post-employment Bene ts (OPEB)

Healthcare and Death Bene ts

Summary of Signi cant Accounting Policies
Basis of Accounting. Post-employment trust fund nancial statements are prepared using the accrual basis of accounting.
Member and employer contributions are recognized in the period in which the contributions are due. Bene ts and
refunds are recognized when due and payable in accordance with the terms of the plan. The actuarial methods and
assumptions used include techniques that are designed to reduce the e ects of short-term volatility in actuarial accrued
liabilities and the actuarial value asset, consistent with the long-term perspective of the calculations.
Method Used to Value Investments. Investments are reported at fair market value. Short-term investments are reported at
cost, which approximates fair market value. Securities traded on a national exchange are valued at the last reported sales
price. Administration costs are nanced through investment earnings.

Plan Description
Plan Administration. Under a City Council resolution dated September 9, 1991, the City of Winston-Salem provides
healthcare and death bene ts as a single-employer de ned bene t plan to cover retirees of the City who have at least
fteen years creditable service and retire from the City of Winston-Salem. Employees hired after June 30, 2010 are not
eligible for the Retiree healthcare bene t. The City Council may amend the bene t provisions. A separate report was not
issued for the plan.
Plan Membership. At June 30, 2018, the Other Post-employment Bene ts Plan membership consisted of:

Inactive plan members or bene ciaries currently receiving bene ts 1282
Active plan members 1198
Total 2480
Benefits Provided. The City pays a $2,000 death bene t and contributes a maximum of $2,520 annually towards the
retiree’s healthcare premium. Retirees participate in the City’s healthcare program until age 65, when they are eligible to
participate in the City’s medicare supplemental plan. The healthcare premium for active employees and retirees under
age 65 is a blended rate re ecting costs for both active and retired employees. Dependents of retirees may participate in
the City’s group health plan by paying premiums that vary depending upon their type of coverage. Employees hired after
June 30, 2010 are not eligible for the Retiree healthcare bene t.

Contributions. The City Council establishes the contribution requirements of plan members. The current annual required
contribution was 3.50% of estimated annual covered payroll. For the current year, the City contributed $4,192,751 or
3.53% of annual covered payroll. The City of Winston-Salem is self-insured. Contributions were made by employees of
$1,945,017 through healthcare premiums. The City’s obligation to provide healthcare and death bene ts may be amended
by City Council.
In 2008, the City entered into a trust agreement with U.S. Bank National Association to establish an irrevocable trust for
post-employment bene ts including the other post-employment bene ts.

106 2018 AN NUAL R E P O R T