Selectmen review town Retirement Board recommendations
By K.B. Sherman, Community Reporter
A number of proposed plans had been submitted to Sherman Actuarial Services LLC by the town's Retirement Board. The board was responsible for overseeing plans for over 946 active, inactive and retired members and beneficiaries, as of Jan. 1, 2011.
The town is on an aggressive path toward full self-funding for all non-teacher employees by 2022, officials said. Until then, money has to be added each year per whatever plan the town selects. Dan Sherman, the CEO of Sherman Actuarial Services, reviewed the different plans with the selectmen, noting which plans took into account cost-of-living increases (COLAs) and which did not. State law requires this type of evaluation every two years.
As of Jan. 1, 2012, Shrewsbury had 582 active employees (not counting teachers, who have their own separate retirement system at the state level), 209 retirees and beneficiaries, 106 inactives, and 28 disabled, for a total of 925. Total town payroll was $22,671,000, up just 0.5 percent over 2011. The average salary for town employees was $38,955, with an average longevity of 11.2 years and an average age of 46.7 years.
The town's retirement system as of Jan. 1, 2012, was 71.0 percent funded; it was 70.8 percent funded in 2011.
Sherman explained the difference between market and actuarial value of the retirement system's total assets. He noted that between 2011 and 2012, the unfunded liability increased by 5 percent, which was due mainly to the decrease in investment opportunities since 2008. Further, he said, people are exceeding calculated mortality rates – they aren's dying as fast as they used to – which adds to the retirement system's burden. Mitigating that, according to Sherman, were the factors such as a decreasing workforce and employees” picking up more of the cost of their healthcare.
Sherman said that the proposal plan chosen by the retirement board was likely to indeed yield the best results.
Under “Option A,” town appropriations under current funding would yield $3,987,702 in 2013 and $4,131,663 in 2014 – going from 17.8 percent of pay to $18.2 percent of employee pay. With $33,.2 million in accrued liabilities as of 2013, total required employer appropriations, with interest, would remain at 21.8 percent of pay in both 2013 and 2014: $4.94 million? and $5,14 million, respectively. This assumes amortization over 10 years, to 2022. Figures differ slightly when COLA is added.
The board then thanked Sherman and his staff and took the report under advisement.
Short URL: http://communityadvocate.com/?p=30391