Traditional folk tales are fraught with stories where the protagonist embellishes reality only to take a precipitous fall because of a bombastic exaggeration. Consider, “The Boy Who Cried Wolf,” or “Chicken Little” proclaiming that the “sky is falling.” In Andover the same folkloric motif has become a modern day saga known as the “OPEB Crisis.” OPEB stands for: the health benefits of retired municipal employees.
This, so-called crisis, is mainly a member of the Board of Selectmen Mr. BobLandry’s manufactured fantasy. Rather than use the mystical fears of ancient lore, Mr. Landry is situating his claims within the realm of numerical mysticism; and, offering as a solution not only his own demise but also the destruction of the way of life of retired Andover public employees. His plan is to change the retirees’ premium contribution from approximately 25 percent to 49 percent, under the guise that this is the only way to fund the retirement health care account. The impact upon retirees would be dramatic. It would increase premium contributions for retirees from upwards of 43 percent to 264 percent, depending upon the plan.
These premium increases need to be considered within the context of real economic costs for those who would be directly impacted. As an illustration, the average public town employee’s pension is $26,600. In addition, 150 employees only average $12,202 as an annual pension, which places them below federal poverty level guidelines. This proposed Draconian health insurance cost shifting needs to be assessed within this attenuated arena.
Instead of cost shifting OPEB expenses on to retirees, as offered by Mr. Landry and his acolytes, there are several viable remedies that should be explored by the Board of Selectmen. First, the employee health insurance advisory committee/PEC has agreed to plan changes that will save the town approximately $1,428,000, of which $357,000 will be provided to active and retired insured members. Employees and retirees have offered their entire savings to help to fund the OPEB account. This is over 50 percent of what the town is offering from present tax revenues. A second way to fund OPEB is to pay down the current retirement account at an accelerated rate, and then divert the savings into OPEB. This would enable the town to utilize savings from the retirement account to fund OPEB future costs much sooner. The city of Boston is currently following this practice. A third mechanism is to invest retirement revenues into PRIT/The State’s Retirement Investment Account. This will provide a higher rate of interest on investments that would lower OPEB liabilities. Finally, the town might consider budgeting OPEB costs as a percent of benefits for new employees. This is affordable because the town only pays 4.5 percent of current town employees’ retirement expenses and does not pay into the teacher/school administrations’ pension plans. This is substantially different from private employers who pay 6.7 percent of their employees’ salaries into the Social Security Administration.
The Andover where I was raised, and where I spent most of my professional career had much different values about caring for others and keeping one’s commitment to public retirees than those values articulated by Mr. Landry. I urge the community and the sincere and reasonable members of the Board of Selectmen to carefully consider the recommendations posited in this letter.
550 Haverhill St., Lawrence
Note: Meyers was a teacher at Andover High School and is the former President of the Andover Education Association - the teacher’s union in Andover.