Although superficially the required accounting figures do not appear to provide any direct insight as to the ability of the Plan to provide future benefits, because we rigorously follow Generally Accepted Actuarial Principles (GAAP) in our OPEB (Other Postemployment Benefits) calculations, the sophisticated actuarial model used in the calculations can produce a number of extremely useful cash flow projections and sensitivity studies for plan decision makers as a natural extension of the original calculations.  Sensitivity studies show the net effects on future cash flow requirements resulting from incremental changes in plan design and/or actuarial assumptions. Here are some examples:

1. Short term (e.g. over the term of the collective bargaining agreement) and medium term (8-10 years) cash flow illustrations - projections can be an indicator of the sufficiency of current and future employer contribution rates to fund benefits over these horizons.
2. Early Retirement Sensitivity - if liberalizing the pension plan's early retirement provisions is under consideration, this study can show the effect on the retiree medical plan's cash flow requirements before and after such a change.
3. Inflation Sensitivity - analyses illustrate the effect of a 1% change in the medical inflation rate assumption on the Plan's cash flow requirements.
4. Sensitivity to Cost-Sharing - retiree cost-sharing can lead to a leveraging of employer costs if the retiree portion does not keep pace with medical claims inflation. The actuarial model can show decision makers how to limit the employer-retiree cost disparity over time under various inflation assumptions.
5. Sensitivity to Medicare Changes - the impact of future government changes in the Medicare program which can have a significant effect on cash flow for retirees age 65 and older can also be analyzed.