Rhode Island Insurer Makes Case for PARS-Administered OPEB TrustCategories: New England Developments,OPEB/GASB 45/75,PARS In the News
The Jamestown Press by Ryan Gibbs, March 31, 2016
The town’s insurer presented the councilors and school board with facts and figures for an irrevocable trust that only would stockpile money to pay for Jamestown’s retirement obligations.
Colleen Bodziony from the Rhode Island Interlocal Risk Management Trust detailed the investment options and costs associated with the service. She said the trust is compliant with the Governmental Accounting Standards Board, which means the money would be used exclusively for retiree healthcare benefits.
Also, creditors would not be able to access the account for collection purposes. When the liabilities have been fully funded, she said, the trust would be dissolved and the remaining money would be released back to the town or school department.
“It’s holding your money for when you want to pay your liabilities,” she said at the March 24 joint workshop.
If both sides wanted to form a trust together to manage their other post-employment benefits, only the council would have to pass a resolution to create the reserve, Bodziony said. Then the town could set up a sub-account for the school. If the school department wanted to administer its own trust, however, the school board would need to pass a separate resolution.
The benefit of pre-funding OPEB liabilities, Bodziony said, is a greater return rate so taxpayers won’t have to bear the burden of the cost in the long run.
Also at the meeting were representatives from Public Agency Retirement Services (PARS), which would administer the trust for the town.