From the Town Administrator's FY 2027 Budget narrative, each department's story is worth sharing.
Retirement
This line item funds pensions for the Contributory (MGL Chapter 32) retirees. There are 104 contributory retirement systems for public employees in Massachusetts. A retirement board governs each system and all boards, although operating independently, are bound together under one retirement law—Chapter 32 of the Massachusetts General Laws—that establishes benefits, contribution requirements, and an accounting and funds structure for all systems. All 104 retirement systems are overseen by the Public Employee Retirement
Administration Commission (PERAC), which was created by Chapter 306 of the Acts of 1996. The Town of Franklin is a member of the Norfolk County Retirement System (NCRS). The Norfolk County Retirement System was established in 1911 for the purpose of providing retirement benefits for County employees. At present, the system includes not only County employees and retirees, but also nineteen (19) Norfolk County towns and twenty-three (23) authorities and special districts. The system is governed by a five-member board chaired by the County Treasurer, and the Treasurer is responsible for the management of the System's funds. PERAC (Public Employee Retirement Administration Commission) exercises general supervision of the System. The Town of Franklin receives an annual assessment from Norfolk County which covers all Municipal employees and non-teaching School Department employees working a minimum of 20 hours per week. The appropriation funds both the normal cost (the cost of current employees’ future pensions) as well as the unfunded pension liability.
Fiscal Year 2027 assessment is $8,786,849.
Health/ Life Insurance
This line item covers the cost of health and life insurance for all active Town employees and retirees from the Town. Retirees from the schools are in a different line item within the Benefits budget.
Active School employees have typically been within the School Budget. In the Joint Budget Subcommittee Listening Sessions last spring, many residents had questions and concerns about this. Town and School leadership discussed whether it might make sense to transfer the budget costs of School Health Insurance from the school budget to the Town Budget in future years. It was voted on and the School Health Insurance will now be under the Town Budget. For FY27, the total appropriation amount for account 300 - Franklin Public Schools reflects their total operating budget minus health and medicare costs. To keep School Health Insurance costs isolated within the total Benefits budget, we have created two new line items; School Health Insurance and School Medicare.
The Town has been a member of the Massachusetts Strategic Health Group (MSHG) since FY23. With support from the IAC and Town Council, the Town is joining the Group Insurance Commission (GIC) for FY27. Per the GIC requirements, the Town will be with them for a minimum of 3 fiscal years. At the time of this report, we have not yet entered the Open Enrollment period for FY27, so we do not know exactly what plans employees will choose in FY27. Since we are joining the GIC, it is hard to estimate what employees will elect since they will now have the option to select from 8 different plans under 4 different vendors. The current FY27 budget model reflects our preliminary estimates of a flat 14% increase, the final appropriation is subject to change when open-enrollment begins on April 1st, giving us more accurate data on actual enrollment in health insurance plans. As of March 26, 2026, there are 1,047 benefits eligible employees between the Town and the Schools. This number changes regularly, depending on vacancies and enrollment at the time the data is collected. 536 employees are currently electing health insurance, which is about 51.19% of all employees.
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Other Post Employment Benefits (OPEB)
The Town provides medical, prescription drug, and life insurance to retirees and their covered dependents. These are all considered “post-employment benefits.” All active employees who retire from the town and meet eligibility criteria will receive these benefits. Retirees contribute between 30% and 50% of the cost of the health plan, as determined by the town. The Town contributes the remainder of the costs on a pay-as-you-go basis.
Many years ago, the Town implemented GASB Statement 45, Accounting and Financial Reporting by Employers for Post-Employment Benefits other than Pensions. Statement 45 requires governments to account for other post-employment benefits (OPEB), primarily healthcare, on an accrual basis rather than on a pay-as-you-go basis. The effect is the recognition of an actuarially required contribution as an expense on the financial statements when a retiree earns their post-employment benefits, rather than when they use their post-employment benefits. To the extent that an entity does not fund their actuarially required contribution, a post-employment benefit liability is recognized on the Town’s Statement of Net Assets.
The Town has financial policies which prioritize investing into OPEB each year. Current policies require increasing our contribution by $50,000 each fiscal year. The Town also dedicates 10% of free cash to OPEB each year.
The Town created an OPEB Trust and all funds were moved from the OPEB Stabilization account by a vote of Town Council. The OPEB Trust Committee voted to invest these funds with the State Pension Reserves Investment Trust (“PRIT”). These funds are overseen by the State’s Pension Reserves Investment Management Board (“PRIM”). The Trust currently has
$17,697,329 in net value as of 2/28/2026.
Compensation Reserve
These funds are for any wage adjustments during the fiscal year, to cover absences in individual departments where additional coverage is necessary and to cover unexpected retirement costs.
If an employee resigns or retires in the middle of the fiscal year, we are required by law to pay out all their remaining vacation or earned time and many collective bargaining agreements include payments for a portion of unused sick time. If we receive ample notice that a person intends to retire, we build the costs into departmental budgets wherever possible. The compensation reserve fund is used to supplement budgets at the end of the year to avoid budget deficits, especially in smaller departments.
Continue reading the PDF of this section. A couple of smaller text sections were skipped as well as all the tables and charts.
For the full FY 2027 budget narrative - https://www.franklinma.gov/DocumentCenter/View/8912/FY27-Budget-Narrative-FINAL-1
The FY 2027 budget information can be found
