Use this search box to find articles that have run in our newspapers over the last several years.
Date: 7/9/2015
WILBRAHAM – The School Committee is exploring the possibility of increasing the cost health insurance premiums for retired teachers during the next 20 years as a way to save the district approximately $21 million.
At its June 23 meeting, the School Committee voted to host a public hearing on Aug. 28 regarding the potential decision to decrease the district’s Other Post-Employment Benefits (OPEB) costs.
School Committee member Peter Salerno stated during a presentation to the rest of the committee that the district currently pays 85 percent of the cost of health insurance premiums for retired teachers.
“State law allows, under a recent Supreme Court ruling, for us to reduce that down to 50 percent of premium,” he added.
Salerno said the proposition entails decreasing the district’s responsibility for paying health insurance premiums down to 65 percent during the next 20 years.
“[It’s] not immediately like I’ve heard some of the rumors that have come over,” he noted.
The district owes a total of $85 million in OPEB costs, which is not uncommon among towns and school districts, Salerno said.
“Eighty-five million dollars is much like our federal deficit that keeps growing to $19 trillion,” he added. “It is an unforgiving model. It is a model that does not allow us to continue to be fiscally prudent and go forward on this.”
Salerno said this year the district paid for more than $2 million in OPEB related costs.
“We should be putting in twice that amount, but we don’t have money,” he added.
Every time the district pays $2 million instead of $4 million into OPEB, the excess $2 million is added to the total amount, Salerno said.
“Before long our obligation comes well over $100 million that we are passing on to future generations without any indication of how we’re going to pay for it,” he added.
During the first year the district would save $343,000, followed by $455,000 the next year, and $585,000 in 2018, he noted.
“There are not many programs that we can self fund,” he added. “This is a way for you to help us do it.”
If the School Committee is unable to negotiate with the teacher’s union for the plan via a proposed trust, retired teachers would each have to pay $2,700 immediately.
He added that the average cost for a retired teacher to pay would be $137 per year.
Salerno said he regards the plan to increase health insurance premiums for retired teachers to be an unpopular one, despite its benefits to the district as a means to preserve services.
“I knew that this would not be something that I would be elected on [for] my next election, I can tell you that right now,” Salerno said.
Superintendent of Schools M. Martin O’Shea did not return a request for comment as of press time.