Efforts allow for more resources to be directed to classrooms and students
MILWAUKEE — Decisions by the Milwaukee Board of School Directors to make changes to benefits and other changes have reduced the district’s long-term liability for other post-employment benefits (OPEB) significantly, according to a report presented during the Board’s November meeting.
Since 2007, the OPEB liability has been reduced by a remarkable seventy percent (70%).
“The McKinsey Report, an independent study commissioned by the Governor and Mayor in 2009, highlighted benefit costs to retirees as a significant financial challenge for MPS,” said MPS Board President Dr. Michael Bonds.
“The Board has worked diligently, often making tough decisions even prior to Wisconsin Act 10, to dramatically cut the OPEB liability.
This has improved the district’s financial outlook and allowed us to redirect dollars back to the classrooms, with a focus on improving student achievement.”
The firm of Gabriel, Roeder, Smith and Company has completed an actuarial valuation for the district every two years for the past six years.
The 2007 GRS OPEB valuation projected the actuarial liability to be $3.78 billion in 2013.
The most recent OPEB valuation by the firm finds the actuarial liability to be $1.2 billion.
This means the district has reduced the long-term actuarial OPEB liability by $2.6 billion.
The most recent change involved a move to Medicare Advantage for eligible retirees, which cut liability by $250 million.
Other actions which the Board has taken to reduce long-term liability include freezing a supplemental pension for current teachers, eliminating supplemental benefits for new teachers, and changing the benefit structure for some part-time employees.
Bonds explained that the Board will continue to explore ways to make operations effective and efficient while putting more resources into classrooms.