Weston FinCom reviews OPEB valuation, debates investment policy overhaul

WESTON — February 27, 2020 — Weston Finance Committee weighs whether 7.75 percent OPEB return assumption can hold. Actuary Linda Bourneville of KMS Actuaries told the committee Feb. 27 that the discount rate will likely come down to roughly 7 to 7.25 percent in the next valuation now that the trust has moved from 100 percent equities back to a 70-30 allocation in October 2019. The OPEB trust holds about $19 million against an $87 million liability, roughly 30 percent funded; a one-point discount-rate drop would add about $10 million to the liability. Bartholomew & Company reported a 27.64 percent return for calendar 2019 against the S&P 500's 31.5 percent, charging 20 basis points plus roughly 28 basis points in underlying fund costs. Member John Harris pressed for heavier equity exposure given a 30-year horizon: "the lowest risk approach right now is to put it all in equities." The committee will convene a working group to draft the town's first written OPEB investment policy.