The Worcester Regional Research Bureau recently released a report, “Other Post-Employment Benefits (OPEB): Holding Government Liable.”
The report [scroll down to read the PDF] spells out in stunning detail the mounting problem of paying for the retirement benefits of current and future employees in Worcester and surrounding towns.
In Worcester alone, the unfunded liability as measured in 2015 is nearly $861 million and with “no new efforts to reduce OPEB obligations, the City’s liability will reach more than $2.5 billion in 30 years.” In comparison, the municipal budget for this fiscal year is $611 million.
The city meets its current obligations with funds from the city budget. It designates 30 percent of its surplus funds, if any, at the end of the fiscal year toward the unfunded portion of the liability as part of the Five Point Financial Plan. In addition, this year’s budget includes $500,000 for the same purpose.
Laudable as those payments are, they are not nearly enough.
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