Tuesday, July 16, 2024

What Exactly Is The SECU Board Goal For Retiree Health Benefits Under Its Unannounced Plan?

https://www.memesmonkey.com/images/memesmonkey/15/15fcf3951a174c53d14f85b136cca9cb.jpeg ... Lot At Stake!

😎 Here's an excerpt from the SECU CPA audited financial statements [full audit here]. Sorry, they are for 2022, but can't find the 2023 report on that new website. But, you'll still get the basic idea. Long term active employees and retirees should pay attention and ask for full disclosure. There is a lot of money at stake!

STATE EMPLOYEES’ CREDIT UNION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2022 NOTE 13 - EMPLOYEE BENEFITS  (page 43)

The Credit Union recognizes post retirement benefit expenses and liabilities on the accrual rather than cash basis. Qualifying SECU retirees are eligible for a fixed allowance toward medical insurance based on a years-of-service, age-at-retirement formula. The Credit Union has invested
monies to fully fund a reserve to meet the estimated obligation for these future post retirement payments. 

At June 30, 2022, the balance of the post retirement benefit reserve was $156,044,867. [1]

Plan assets in excess of benefit obligations included in other assets $18,672,889. [2]

The discount rate, expected rate of return on plan assets and health care cost trend rate are assumptions which significantly affect post retirement accounting. [3]  Relatively small changes in these rates can substantially change the recorded post retirement expense and accrued liability.
Management believes the discount rate, expected rate of return on plan assets and health care cost trend rate used in determining the year-end post retirement amounts are reasonable based on currently available information.
Assumptions used to determine benefit obligations :

Assumed health care cost trend rate: [4]

Initial rate ⬆ +8.00%

Ultimate rate ⬆ +5.00%

Year ultimate rate reached 2030

 ðŸ˜Ž For those of you who never really cared for accounting here's the skinny: [1] there is a pool of $150+ million at stake, [2] there is an excess of $18+ million in the pool, [3] the SECU executive leadership team believes its forecast of future rates and costs are reasonable, [4] the SECU ELT believes that health care costs will  increase between ⬆ + 5% and ⬆+ 8% each year over the next 5 years - to 2030. 

😎 ... that would also imply that the SECU is already fully funding the cost of those "ELT" estimates of rising annual ( +5% to +8%!) future healthcare costs for retirees. 

😎 How does ⬇ capping "their" future costs now, help current long-term and retired employees?

... as they say trust, but verify - there is a lot at stake.

 

 

18 comments:

  1. So what's the rush? Do this before retirees figure out what's going on?

    ReplyDelete
  2. Replies
    1. @5:32pm Usually interpreted as an estimated range of between 5% to 8% each year until 2030.

      Would be better to use more current 2023 financial statements but doubt anyone would question rising healthcare costs over next few years - 5% to 8% increases sounds reasonable.

      Delete
    2. yes that's reasonable. But then what when 2030 comes?

      Delete
    3. The end of the world comes in 2030, that’s what.

      Delete
    4. 7:45pm Each year the estimates are reviewed and revised, but don't believe anyone believes healthcare costs are going down anytime soon.

      Delete
    5. "The end of the world comes in 2030, that’s what."

      well then I'll be in a better place, no insurance needed :)

      Delete
    6. 8:24pm LOL! But, if the world doesn't end in 2030... instead of being in heaven, you're going to be in a hell of a mess!

      Delete
  3. A true leader is one that is more concerned with everyone else than themselves, leadership like that cannot be faked... we see the results when it is ...

    ReplyDelete
    Replies
    1. There is no such thing as a leader who cares more about everyone else than themselves. Humans are innately self centered (some more than others).

      Delete
    2. @6:24pm this is false.

      Delete
    3. @6:24pm sounds like a you problem. I care about others more than myself. So do many others.

      Delete
    4. SECU employee here. I used to have a manager who cared more about others than himself. He doesn't fit in anymore. I have a new manager now.

      Delete
    5. 6:24 PM. ... I understand why you would think this way but honestly there are leaders out there that feel this way... they're just few and far between!
      I hope you land under one or better yet become one!

      Delete
  4. When all you have is power and greed in your soul you will fight to the end to keep it, why? Because it's all you have ......

    ReplyDelete
    Replies
    1. Think about it…what do these people have in power have outside of power? Nothing. They are probably lonely people with 0 friends so this is what they live for. Profit and control. No friends to spend time with…family probably looks at them side eyed once they hear they sold out SECU…

      Delete
  5. The 2023 audited financial statements are clearly visible on the website. https://www.ncsecu.org/content/dam/ncsecu/pdfs/newsroom/annual-reports/2023AuditedFinancialStatement.pdf

    ReplyDelete
  6. They should start this for new hires. Not for the ones already working or retired that they said in the employee handbook that the CU would pay for their insurance as a retirement perk

    ReplyDelete