Friday, May 2, 2008
Article 12 - Actuarial services
The state’s General Accounting Standards Board (GASB) has passed regulations requiring each town to calculate the present value of future post-retirement benefits. This information will be required on disclosure statements starting in FY09.
As benefit costs have risen, there seems to be a concern that towns are not putting enough aside to prepare for years of paying benefits post-retirement. The philosophy is that those costs should be considered a current liability, as they are accrued with employment.
Adhering to the law will require statistical analysis using mortality tables, weighed for each employee’s age, and marital situation, as spouses can also collect. The cost for this work is estimated at $12,000, and it is required every two years. Finance Director Larry Barton would like to apply $6,000 to the budget each year to avoid spikes.
Barton expects the outcome of the calculations will be “a scary number” in the several millions, but compared to other towns, “we will look good.” Carlisle’s contribution to employee benefits is 50%, which is the lowest possible according to state law. Barton has advised the Selectmen that the town should comply with the requirement, because failure to provide this information would result in a qualified opinion on the audit report, possibly impacting the town’s bond rating. ∆
© 2008 The