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This thread has devolved into absurdity. Lets try to get back on topic here.

Obviously the major issue people are arguing over the OPEB trust fund.

Firstly, I am curious about Mr. Cushman's life time retiree healthcare assumption of $1.8 million dollars. Is this number listed in the fiscal note or was it calculated solely on the assumptions posted above? Sorry, but I haven't seen the fiscal note. I only ask because using the assumptions Mr. Cushman posted above (employee hired at 25, 30 year career, 25 year retirement life expectancy, 6% healthcare cost growth...) and with the employee transitioning to medicare at age 65 I calculated a lifetime healthcare cost closer to $1.3 million. That is a significant discrepancy. I'm just curious how you arrived at that number, or if the city arrived at that number and I'm open to the possibility that I'm wrong or have incomplete information. I just want to get real numbers.

Secondly, I must be interpreting the language of the OPEB trust differently than Mr. Cusman. The key language appears to be in bullet point 6 of the redline version of the TA. Bullet point 6 of the OPEB trust section says “at retirement, the funds attributable to the employee will remain in the trust and continue to earn income that will be used to pay for a portion of the retirees healthcare costs until those funds have been exhausted or the retiree passes away.”

Using Mr. Cushman's numbers this hypothetical employee retirees after 30 years with a principal "account" balance of $209,994. With a life expectancy of 25 years this account will be responsible for $8399 payment on behalf of the retiree every year for 25 years. At that point the account will be $0. Bullet point 6 then states whatever income is earned by the retirees "account" after retirement will be used to offset a portion of the retirees healthcare cost. After 25 years the retirees account will have generated an additonal $173,875 of interest income during the employees retirement for a total OPEB trust contribution of $383,869.

Third, in the event that a retiree dies prior to the life expectancy calculation the retirees estate is simply being reimbursed for their portion of the retirement health benefits they were were projected to recieve and for which they "prepaid" while employed but did not receive. For example if the hypothetical employee these assumptions are based on died 20 years into retirement their estate would recieve a check for $41998.($209,994 starting "account" balance minus 20 years of $8399 yearly contribution).

Essentially, when an employee retires they are taking their money and buying future healthcare rights. In this example the retiree is essentially paying the city $8399 a year every year for a projected 25 years of health coverage. However the employee is paying the full $209,994 up front so that the city may invest the money, in the form of the OPEB trust, in order to generate more income to further offset the city's end of the cost. And in the event that the retirees dies before utilizing all their upfront payment their estate gets reimbursed any years they prepaid but didn't receive coverage.