TOWNSEND -- When it comes to funding retiree benefits, the North Middlesex Regional School District is in good shape, officials say.
In real dollars, the cost for retiree health, dental and life insurance is as high as it will ever be, said Parker Elmore, president and CEO of Odyssey Advisors during Monday's School Committee meeting.
The district can continue a pay-as-you-go approach to funding these retiree costs.
With fewer teachers retiring each year, and a low to moderate increase in health-care costs, the district is not facing a bubble payment like other districts will.
Forming a trust for retiree benefits would help make things a little more predictable, he said. If a sudden increase in health-care costs occurs, the district could use the trust to cover other post-employment benefits, rather than cutting staff or closing schools.
If the state ever assumes the responsibility for OPEB payments, the money in the trust would still belong to the district and could be used for other expenses.
Right now, the cheapest option is to continue the pay-as-you-go approach. Once the trust generates enough interest to pay the retiree costs, the towns will no longer have to fund OPEB costs in the annual budget.
A plan to create a trust to fund OPEB costs in the future could result in a better bond rating, he said. "Give a little now to get a lot later," Elmore said.
If the bond ratings improve, the costs for the funding will be covered by lower borrowing rates, said Will Hackler, at-large member. The bond ratings for the three member towns would also increase.
The finance subcommittee will consider the various options, said Chairman Sue Roberts.
Before making any decisions about a trust, the district should open a discussion with the bond-rating people. "Feel them out and see what would make them happy," Elmore said. "Have the conversation before you commit to anything."