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Authorize the Town of Chapel Hill to Participate in the North Carolina Ancillary Governmental Participant Investment Program (AGPIP).
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Staff:
Department:
Amy Oland, Director
Business Management
Overview: In 2016, Council adopted a resolution creating an Other Post-Employment Benefits (OPEB) trust pursuant to North Carolina General Statute 159-31.1. The purpose of the trust is to accumulate assets to help pay future costs for providing medical insurance coverage to retirees. The Town would like to expand the investment options for its Other Post-Employment Benefit Trust to maximize the long-term growth of these funds.
Recommendation(s):
That the Council adopt the attached resolution authorizing the Town of Chapel Hill to participate in the Ancillary Governmental Participant Investment Program for the Town's Other Post Employment Trust (OPEB) benefits.
Additional Background:
In 2016, Council adopted a resolution creating an Other Post-Employment Benefits (OPEB) trust pursuant to North Carolina General Statute 159-31.1. The purpose of the trust is to accumulate assets to help pay future costs for providing medical insurance coverage to retirees. By creating an irrevocable trust, the Town ensured that the accumulated OPEB pre-funding assets can only be used to pay for OPEB benefits and related costs. The creation of the trust also allows these assets to "count" toward the actuarial calculation of the Town's OPEB liability, thereby reducing the amount of the liability.
The Town has been putting aside funds on a regular basis to offset these future costs. Funds in the trust currently exceed $6 million and they are placed in very conservative, low risk investments allowed under North Carolina General Statute 159-30, Investment of Idle Funds. While these investments are appropriate for Town operating and capital funds that require a high degree of liquidity and no risk of loss, OPEB pre-funding assets are like pension funds and a long-term inve...
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