OPEB Board Meets, Hears All is Proper with PRIM

Above, the PRIT fund is one of the investment funds managed by PRIM.

The OPEB Board of Trustees, which meets irregularly compared to many town boards, met on the morning of Nov. 21 primarily to hear from Francesco Daniele, a representative of Massachusetts PRIM (Pension Reserves Investment Management), which invests and manages the town’s OPEB funds.

The town’s website explains that Other Post-Employment Benefits (or OPEB) are benefits (other than pensions) that U.S. state and local governments provide to their retired employees.

These benefits principally involve health care benefits, but also may include life insurance, disability, legal and other services.

The Town of Franklin has established an OPEB Trust Fund in order to invest the funds that are allocated by the Town Council in the annual operating budget and capital budget to help maximize the investment for employees. Additionally, by investing the funds, it helps stake a small financial obligation off of the taxpayers to help leverage the best investments for the retirees.

The Town of Franklin has an official OPEB policy that was adopted by the Town Council.

Daniele went through a presentation about the current state of PRIM, acknowledging that its most recent performance had been somewhat below expectations but that longer-term it had been doing well. He touched on the aspects of PRIM that focus on ESG investing (environment, social, governance) and said that the function and focus will continue but the effort is being renamed “because ESG has acquired some negative connotations.”

Trustees asked for clarification and details on a number of points but were apparently satisfied with Daniele’s report.

Later, Town Administrator Jamie Hellen explained, “. The state did a study about ten years ago that showed due to extremely higher structural costs to health care, cities and towns (and the state) have significant unfunded liability to pay for those long-term benefits. Hence why Franklin established and is committed to this financial liability. We have a policy and have been following it for about eight years. Franklin is in the top 10% of cities and towns who are way ahead of the game on this. This is a factor when looking at bond ratings as well,” he added.