The Reality Of Southbridge's Pension Commitments

Ken O'Brien

Recent discussions on this site have related to issues confronting Southbridge's finances in the context of real estate taxes.

One area of concern is the town's commitment to financing the long-term costs associated with its retirement obligations to town employees.

This area is frequently overlooked when addressing the town budget. In large part this is a function of the fact that the complexity of the issue is beyond the grasp of many.

As I pointed out in a comment on an earlier post:

 According to the town’s most recent bond offering “The total actuarial liability applicable to the entire system [Southbridge’s retirement plan] at January 1, 2014, was $67,505,108; the unfunded liability of the system was $33,179,035."
In addition other post-employment benefits amounted to $47,599,891 based on the latest actuarial analysis completed July 1, 2013. “As of June 30, 2015, the balance in the OPEB Trust was $513,606.”

Health Care Cost Rising At Slowest Rate Since 1961

The revised third quarter economic data contained some good news for President Obama and the Democrats. Thanks to Obamacare healthcare costs have risen at their slowest rate since 1961.

From The White House:

Prices of health care services have risen just 0.7 percent over the past four quarters, extending the recent period of exceptionally slow health care price inflation, while expanding coverage has driven faster growth in aggregate utilization of health care services. Prior to 2015, an increase in health care services prices as low as the 0.7 percent increase over the most recent four quarters had not been seen since 1961.