15
Oct
2015

Rhode Island Trust OPEB Funding Program is Off to a Great Start

Categories: New England Developments,OPEB/GASB 45/75,PARS In the News
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14 Members Strong and Growing

The Trust’s OPEB Funding Program is off to a great start with 14 new Members with a number of other entities interested in joining The Trust OPEB Funding Program in the coming months. To date, Member entities have contributed more than $13.9 million toward their OPEB liabilities through The Trust OPEB Funding Program.

Members have found the Program offers a number of advantages which include:

  • “Turn-key” comprehensive approach
  • Fast, simple implementation process with signature ready
    documents
  • No start-up fees
  • Flexible investment options with fiduciary protections
  • Individual Member accounts with no sharing of liabilities
  • Fees that decrease as assets grow
  • Personalized service
  • No minimum fees or minimum contributions
  • No IRS application process or legal fees
  • Local control as each Member determines its own actuarial assumptions, methods and valuation timing
  • Regular reporting – monthly statements, quarterly reports and periodic onsite reviews
  • Ongoing compliance costs are reduced
  • Low investment management expenses

As a multiple employer trust, The Trust’s OPEB Funding Program offers a low-cost fee structure that is based on a percentage of assets. These assets consist of pooled contributions from Trust Member entities as well as several other organizations that also participate through Public Agency Retirement Services (PARS), The Trust’s partner for the OPEB funding Program. The fees not only start out low, but as assets grow with more and more entities making contributions, the fees can be reduced further, providing even more significant long-term savings.

“We are thrilled at the response by our Members and have found the Program to be a great option not only for entities who were looking for a solution to initially address their OPEB liabilities, but also for those who had their own OPEB trust already established,” said Colleen Bodziony, Trust Director of Operations and Member Services.

After listening to The Trust’s presentation on its OPEB Funding Program design, The Town of Charlestown compared it to its existing OPEB trust and realized there were significant savings to be had. “We are able to save $17,000 per year in fees by moving over to The Trust OPEB Funding Program,” said Pat Anderson, Treasurer, Town of Charlestown. She explained that unlike The Trust OPEB Funding Program, the fees in their existing OPEB trust were higher and continued to go up each year. The potential for additional fee savings as the assets increase, as well as the Town’s existing relationship with The Trust, made the decision to switch to The Trust OPEB Funding Program a relatively simple one for the Town of Charlestown.

The Trust’s OPEB Funding Program provides participating Members with a trusted solution to proactively address their OPEB liabilities that is far more economical and efficient than each local governmental entity attempting to coordinate the same independently. Members are able to invest their assets in one of three investment portfolios: conservative, balanced or growth. These portfolios have been designed by Vanguard for use in The Trust OPEB Funding Program. Although the assets are pooled, each participating Member maintains its own separate accounts, providing them with full discretion regarding their contribution amounts and timing.

 

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