SNOW HILL – The county’s retiree benefit funds continue to improve, according to an annual report.
Finance Director Phil Thompson told the Worcester County Commissioners last week that the county’s new OPEB (Other Post Employment Benefits) liability decreased 10% in the last year. The improvement comes in the wake of an increased level of funding paired with efforts to reduce costs.
“We’ve reduced the overall liability by about 10% or $13 million in one year,” Thompson said. “We continue to improve our position relative to the long-term viability of our benefit plan.”
Thompson told the commissioners that each year, the county is required to have an updated study of its OPEB liability done. The county has OPEB liability related to the long-term health care benefits of general government employees as well as for the Worcester County Board of Education.
“The study looks at the funding needs and estimated expenses associated with providing these benefits for the next 30 years,” Thompson said.
He said local officials began the process almost 20 years ago, as the first study was done in 2006 and an OPEB trust was created in 2010.
“We currently have a trust for the general government and one for the board of education,” he said. “We’ve made numerous changes to our plan in recent years which have resulted in significant gains in relation to our funding status and the overall liability.”
The most recent study shows the general government trust fully funded. The county has close to $75 million in the account, with total OPEB liability at $59 million.
“This has taken us about 17 years to get to this point,” Thompson said.
The board of education trust is in a better position than it was but is far from fully funded.
“We have decreased the liability by about $11.5 million for the year,” Thompson said.
The board of education OPEB account’s assets are about $35 million while the liability is $175 million. According to the report, the board of education’s OPEB account is 20% funded while the county’s is 126% funded.
Thompson added that he expected the board of education fund to continue to improve, as the commissioners in recent years have made a dedicated effort to allocate more to the school system’s retiree benefits.
