Another Acronym to Track
My Patch column, this week, discusses the latest acronym with which active citizens must acquaint themselves:
… OPEB stands for “other post-employment benefits” and, in Tiverton for example, includes health, dental and life insurance covering employees and their families after their retirement.
According to a press release announcing the issuance of the final report from the Rhode Island Senate Municipal Pension Study Commission, the unfunded OPEB promises that cities and towns have made to their employees amount to $2.4 billion. As the Providence Journal highlighted when reporting on the release, this is on top of about $2 billion in unfunded pension liabilities that cities and towns have incurred. …
Eventually, of course, the bills begin to come due. Tiverton currently covers its OPEB responsibilities on a year-to-year, pay-as-you-go basis, amounting to nearly a million and a half dollars annually. For fiscal 2010, the expense was $1,362,886. That’s more than 4% of the tax levy, for that year. It’s also only 42% of the GASB-suggested payment (technically called an “annual required contribution”), which was $3,222,448. A payment of that size would have been 10% of the levy.
In fact, if Tiverton were to make the “required contribution” to all of its post-employment obligations, it would be storing away about 18% of its tax levy, each year, to keep public employees retiring young.