2012-09-20-AC-min - Laserfiche WebLink

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September 20, 2012 Glenn Parker has discussed the funding model with Dan Sherman that can be summarized as budgeting for pay -as- you -go plus the normal cost. Such a model eventually resolves the unfunded liability. Joe Pato and Mollie Garberg expressed a desire to see information fleshed out more with multiple scenarios. It was generally agreed that more analysis would be useful, although Alan Levine explained that no analysis will give in advance the numbers that are really needed, e.g., future rates of return on investments. Towns are currently using eight percent for the pension plans, but some believe the economy is in a new era, and this is too high. David Kanter of the Capital Expenditures Committee commented that if there ever are surplus funds, the CEC will have lots of uses for them. He suggested that until there is a mandate to fund the OPEB liability on the financial statements, Lexington should wait to do this and should not fund the liability ahead of other towns. Rob Addelson explained that towns are beginning to address this issue because it is getting a lot of attention from Moody's and GASB. He and Carl Valente are interested in having a plan for Lexington. ACTION ITEMS: Rob Addelson will reconvene the OPEB working group. The group will be asked to engage an actuary to help validate funding scenarios and to evaluate the sensitivity of the different approaches. The Committee will ask that this subject be included on the summit agenda. The meeting was adjourned at 9:10 p.m. Documents and other exhibits used at the meeting are listed below. Respectfully submitted, Sara Arnold Recording Secretary Approved. October 23, 2012 Exhibits 1. Meeting Agenda posted by Glenn Parker, Chair 2. Further Discussion of Policy Issues concerning the Funding of Future Liabilities for Health Insurance for Retired Employees (OPEB) of the Town of Lexington, prepared by Alan Levine