The OPEB Trust was established to help meet the town’s obligation of funding current and future retiree’s health Insurance. The town provides health Insurance for both active and retired employees by generally paying 68 percent of the active and retiree health insurance plan while the employee pays 32 percent of the cost. There are a few employees and retirees that share the cost of a 50/50 split and some retired teachers that are “grandfathered” that the town pays 85 or 90 percent of the cost.
When a retiree reaches age 65 they enroll in Medicare and town provides a supplement plan at the same ratio as mentioned above.
Every two years we have an actuarial study to determine our unfunded obligation
As of 6/30/19 the unfunded liability was $68.55 million dollars. As of 6/30/19 the amount of funds set aside in the trust is $5,706,986. Currently the town appropriates approximately 10% of its annual Free Cash plus as an annual appropriation in the budget of $600,000. We have asked the Town Council to increase the annual appropriation by $50,000 per year.
These efforts are a good faith attempt to meet our obligations without compromising all the other services provided to the citizens of Franklin. Once our unfunded pension obligation is paid off in 2032 we should be able to commit several million dollars a year to meet our underfunded OPEB obligation.
Chair OPEB trust
OPEB = Other Post Employment Benefits
For additional information on OPEB visit the Trustees page on the ToF web
For the full Annual Report for 2020
Prior Annual Reports can be found online
|Franklin Annual Report - 2020: OPEB Board of Trustees|
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