Cohasset Select Board Reviews Pension Challenges, Budget Updates Ahead of Town Meeting
OPEB Committee reports progress on funding, warns of potential pension cost increases as officials prepare for Monday's annual town meeting
COHASSET - May 6 - The Cohasset Select Board receives updates on the town's pension and post-employment benefits funding status during their recent meeting, with committee members warning of potential challenges ahead despite current financial stability.
The Cohasset Select Board received updates on the town's pension challenges and financial status during their recent meeting, while also preparing for the upcoming annual town meeting scheduled for Monday.
Tim Davis and Katie Dugan from the Post-Employment Benefits Committee presented their annual report, highlighting both progress and concerns regarding the town's retirement obligations.
"We've been at this now for about 15 years," said Davis, who chairs the committee. "We've moved up to 22% fully funded for our OPEB liability."
Dugan explained this puts Cohasset in approximately the 70th percentile among Massachusetts municipalities for Other Post-Emplyment Benefits (OPEB) funding, with a $7.8 million reserve as of June 2024.
"A lot of it comes down to the consistency of having a policy and following that policy," Dugan said.
The committee plans to update its investment policy for these funds, working with Town Treasurer Linda Cole to modernize their approach.
While OPEB funding shows positive progress, the Norfolk County pension system presents more significant challenges. The pension system, which covers town employees but not teachers, is currently 72% funded compared to a statewide average of 75%.
"From FY14 to FY26, it's gone from 1.4 million to 3.7 million. So it's doubled in a little bit over a decade," Dugan explained regarding pension costs. "It's been an 8.8% compound annual growth rate, which relative to two and a half prop, that's significant."
Recent changes in actuarial assumptions, including mortality tables and discount rates, have increased the pension liability significantly. This threatens to delay full funding beyond the previously targeted 2030 date.
"The key here for me is, as far as OPEB is concerned, is to stick with the plan that we've all approved over the last 15 years," Davis said. "If the rating agencies start seeing a slip, then we're going to be in trouble."
The committee is working with other Norfolk County communities to negotiate more manageable payment schedules while still meeting the state-mandated 2040 deadline for full funding.
"It is a much more political situation that we're in with the pensions," Davis noted. "What we're trying to do is to get a plan together with our community in the Norfolk County Pension Fund to come up with a plan that is reasonable."
Town Manager Chris Senior presented the third quarter financial update, reporting that the town's finances remain on target.
"The general fund is doing okay. Tax collections are right on. Our excise taxes are actually about to exceed our budget, which is great," Senior said.
He noted that investment returns are performing well due to the treasurer's efforts to secure favorable interest rates for town accounts.
The water and sewer enterprise funds are also performing as expected, though Senior mentioned the need for future discussions about infrastructure issues in both systems.
"We need to schedule a meeting, a board agenda probably in June, having Brian come in and talk about the MWRA regional water study," Senior said.
Senior also provided an update on the town's full-time equivalent (FTE) employee count, which stands at 119.5 for fiscal year 2026, down slightly from 121 in the previous budget. Public safety accounts for approximately 35% of these positions.
Select Board members expressed appreciation for the town's stable financial position, particularly in comparison to neighboring communities.
"Driving around last weekend, I saw all the towns with overrides and the conflicts over the overrides. We don't have them. So thank you," said Chris Plecs.
David Farrag added, "The budget is most certainly sober and sensible. And keeping it on that track and working with the other committees and the school committee and the advisory and the like, as well as the town hall staff, I think it's kept a steady hand."
Senior reminded residents about the upcoming annual town meeting on Monday, May 12, at 7 p.m., followed by the town election on Saturday, May 17, from 8 a.m. to 6 p.m. at Deer Hill School.
"The greatest day of local democracy is upon us on Monday," Senior said. "There are 18 articles, only about 14 of them are going to take aggregate substance that night."
The meeting concluded with Jack Creighton's final comments as a Select Board member, as he chose not to run for reelection due to his belief in term limits.
"It's not our power, it's the power of the people. And we owe an obligation of transparency. We owe an obligation for good dealing, for keeping our word," Creighton said in his farewell remarks.
The Select Board will meet briefly before town meeting on Monday at 6:45 p.m. for a final review of articles and presentations.