NOTES TO FINANCIAL STATEMENTS NOTE 2. DEPOSITS AND INVESTMENTS (CONTINUED) Retiree Medical and Dental Plan (Continued) Custodial Credit Risk for Deposits - Custodial credit risk for deposits is the risk that, in the event of a financial institution failure, the OPEB Plan may not be able to recover deposits held at the financial institution. As of June 30, 2020 and 2019, the OPEB Plan was not exposed to custodial credit risk with respect to its investments. As of June 30, 2020 and 2019, the OPEB plan held $8,883 and $8,822, respectively, in mutual funds and $5,165 and $4,538, respectively, in exchange traded funds. Concentration of Credit Risk – Concentration of credit risk is the risk of loss that may be attributed to the magnitude of a government’s investment in a single issue. At June 30, 2020 and 2019, the OPEB Plan holds more than 5% of its investments in the following funds: Investment Mutual funds Cohen & Steers Real Estate Securities Fund, Inc. Dodge & Cox Income Fund Federated Institutional High Yield Bond Fund PIMCO Short-term Fund Institutional Class Principal High Yield Fund Vanguard Short-term Investment Grade Fund Total mutual funds Exchange traded funds Vanguard 500 Index Fund Vanguard Small-Cap Fund Total exchange traded funds $ $ $ $ 2020 1,074 $ 1,222 707 1,161 - 1,343 5,507 $ 4,538 $ 627 5,165 $ 2019 1,135 1,128 705 1,129 692 1,280 6,069 3,864 674 4,538 Credit Risk – Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations to the OPEB Plan. The OPEB Plan’s investment policy limits eligible investments to a variety of clearly delineated investment funds to permit the OPEB Plan to diversify in order to maximize the potential investment returns and minimize the risk of any one fund. Interest Rate Risk for Investments – The OPEB Plan does not have a formal investment policy that limits investment maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Foreign Currency Risk: At June 30, 2020 and 2019, the OPEB Plan assets had no exposure to foreign currency risk. 32
