Selectmen approve terms to hire new actuarial firm
After a maelstrom erupted earlier this year at Town Hall following the discovery of undercounted retired municipal employee health-care costs, the town has hired a new actuarial firm to oversee those benefit plans.
"They're very well-versed in the issues that confront Westport," First Selectman Gordon Joseloff said of Milliman. "They're a national firm, and they bring a lot of resources to the table that we think will certainly benefit Westport."
In addition to providing actuarial data, Milliman will also advise the town on achieving "cost-savings and efficiencies" in town employee benefit packages, Joseloff added.
While some Republicans have clashed with the Democratic first selectman over town fiscal policies, the proposed hiring of Milliman appeared to have bipartisan support.
"We're delighted that an actuarial firm with significant municipal experience has been selected," said Republican Board of Finance Chairman Avi Kaner. "Milliman will baseline our pension and OPEB obligations so we can budget far more effectively."
Terms of the contract with Milliman were not immediately available.
The hiring of Milliman culminates a year of intense scrutiny by town officials of Westport's obligations to municipal employee benefit plans. In June, Board of Finance members learned that the last actuarial report on the town's liability for retiree medical costs, also known as Other Post-Employment Benefits, omitted more than 400 town employees from its calculations. That 2008 analysis, which forecast the town's unfunded OPEB liability at $50 million, was conducted by an actuarial firm later acquired by Pentegra. Several finance board members have since leveled strident criticism at Pentegra for its belated discovery of the oversight, with Kaner calling for the firm's dismissal.
In September, Pentegra delivered a new report that estimated the town's unfunded OPEB liability between $75 million and $120 million. Finance board members, however, have questioned the accuracy of Pentegra's new projections.
Headquartered in Seattle, Milliman has more than 2,500 employees in 54 offices worldwide. In 2010, the firm had revenues of $676 million, according to the firm's website.
The expected hiring of Milliman would be the latest in a series of fiscal management changes at Town Hall. Republicans regained control of the Board of Finance in last month's town election, after the town's management of its OPEB obligations emerged as a major campaign issue.
About two months before the election, town Finance Director John Kondub announced that he would retire in February 2012. His successor will likely be hired by next month.