The factors contributing to the successful funding of other post-employment benefit plans in municipal government : does the municipal management team make a difference?

Abstract

This dissertation examines the factors that contribute to the successful funding of post-employment benefit plans, other than pension plans, sponsored by municipal governments (OPEB plans). These plans primarily provide retiree healthcare benefits. The study analyzes the degree to which the professional experience and training of chief financial officers (CFOs), and the mayors or managers who serve as chief executive officers (CEOs) affect the level of short-term and long-term funding of OPEB liabilities. Several hypothesized models include other factors such as form of government, municipal financial condition, plan actuarial parameters, and plan participant cost sharing. OPEB plan funding is assessed from a cumulative and annual perspective.;The study has surprising and mixed findings. Contrary to hypothesis 1, only the total years of government service of the CEO are found to impact cumulative OPEB plan funding; as the CEO's years of experience increase, OPEB plan funding declines. But from a short-term perspective (hypothesis 2), as the CEO's years of service in current position increase or the CFO's total years of government service increase, OPEB plan funding improves. These results are tempered by the finding that, as the CFO's years of service in position increase, the funding of the OPEB plan declines. Theoretical contributions include comprehensive and adaptable models for predicting OPEB funding behavior, a ratio for gauging cumulative plan funding when the formal GASB Statement No. 45 funded ratio is not informative, and an index for capturing the plan participant's cost burden in plan funding. This research suggests that training programs for municipal administrators should develop a better commitment to funding long-term OPEB liabilities.