Where it stands as of Tue, Apr 28
Long-term funding strategy for the town's Other Post-Employment Benefits liability remains under review. The Select Board is examining Southborough's roughly 8 percent funded ratio and potential long-term approaches, including redirecting regional pension catch-up payments to OPEB once the retirement system reaches full funding around 2036. The town continues to contribute its baseline $250,000 annually while awaiting modeled scenario projections from actuaries.
- Undecided Select Board Exploring contribution options and requested actuarial models targeting 80 to 100 percent funded status by various target years.
Every time it came up newest first
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OPEB actuarial valuation and funding strategy
Linda Bournival of KMS Actuaries presented an educational overview of the town's Other Post-Employment Benefits (OPEB) liability, trust assets, and discount rates. The board discussed Southborough's funded ratio compared to neighboring communities and considered long-term funding strategies, including the possibility of redirecting pension catch-up appropriations toward OPEB once the Worcester Regional Retirement System reaches full funding around 2036.
- Southborough currently appropriates $250,000 annually into its OPEB trust fund in addition to pay-as-you-go retiree health premiums.
- The town's OPEB trust fund holds approximately $4.5 million, reflecting a funded ratio of roughly 8 percent.
- Worcester Regional Retirement assessments currently increase about 10 to 11.7 percent annually and are scheduled to be fully funded by 2036.
- When the regional retirement system is fully funded, approximately $7.5 million in annual catch-up payments could theoretically become available for reallocation.
- Actuaries will model various scenario projections, such as aiming for an 80 percent or 100 percent funded status by target years.
Outcome: Discussion only; the board agreed to have the actuary model multiple future contribution scenarios.