NARRAGANSETT—At the July 16 regular meeting, the Town Council continued its ongoing discussion regarding pension funding, both in the short and long term. The town’s actuarial consulting firm, Nyhart, developed an experience study last year which outlined a number of recommendations for the Council to consider in order to address their pension system.
After review, the Town Council identified a number of recommendations that they were uncomfortable with based on Nyhart’s assumptions, namely setting the rate of investment return at 7.5 percent. Although Nyhart suggested that the rate of return remain unchanged, Council members disagreed with the assumption based on the town’s past experience of holding the town to that 7.5 percent rate.
“We have hired [Nyhart] to calculate our liability, and they have certain figures that they’ve proposed we use to do it,” said Town Council President Glenna Hagopian at the July 16 meeting. “The question is do we have alternatives, what would they be, and having a conversation for the rationale of these numbers, are they based on historical data?”
“We want accurate numbers, that is all, and in our judgment, we are not in the position to say this is accurate or that is not,” said Councilman Christopher Wilkens. “We just want figures that make sense.”
Finance Director advised the Town Council that the 7.5 percent rate of return, although it is based on a historical range, is the most accurate assumption the town has at its disposal, and any change to the rate would have to be approved through an ordinance change. Changing the rate of return, either higher or lower, might also have unforeseen impacts on the town’s ability to control costs.
For the complete story, pick up Friday's The Narragansett Times.