Live reporting: OPEB

G. HEARINGS
none

H. LICENSE TRANSACTIONS
none


I. PRESENTATIONS/DISCUSSIONS
OPEB, Dan Sherman

also made presentation to FinCom this evening (meeting at 6:00PM)

had been 'pay as you go' costs for retirement
government accounting standards required changes in how this was handled
the amount of the outstanding promise was required to be specified, hence - "unfunded"

what is the time value of the money invested?

400,000 plus 10% of free cash is currently being planned for as part of the budget for the annual contribution. However, the requirement is about $2M so we are 'underfunded'

total unfunded liability = $92,5M
or 1.5% funded

the fact that we are setting money aside in the trust is good in the eyes of the rating agencies

the liability is 161% is low compared to peers, a 'wonderful place to be'

the annual cost of a home is all the ongoing costs, heating, electric, etc.
you also have a mortgage which is your liability

ARC = Annual Required Contribution, the amount that will be the line item eventually added to the budget

most communities are like us, setting something aside but not completely funding the liability

Like Needham, put some aside, gradually up the amount and eventually close the gap

Shrewsbury 2020 or bust, attempting to fully fund

some communities are not doing anything which the rating agencies won't like

Dan is currently a member of the FinCom for Wakefield, putting money aside to get fully funded eventually

pre-funding brings a bunch of advantages

OPEB is the one thing that for an employee is not paid up front, is paid after the employee retires

Q - to clarify on the unfunded and partial pre-funding

Q - can we change the plans we offer?
A - yes, we change the health plans frequently working with the unions

68/32 ratio

probably about 20 of the 350 communities are fully pre-funding

new employees don't get the same benefit as older employees
law change is being looked at for a change in the formula

Padula - recommend a motion to ask for legislative help
Kelly to be added to a future agenda

full copies to be posted to Town webpage in a couple of days