School board’s actions reduced benefits liability projections by $3.63 billion over last eight years
Changes in funding allow Milwaukee Public Schools to direct more funds to students
MILWAUKEE (Jan. 18, 2017) – Decisions the Milwaukee Board of School Directors made have cut the district’s liability for retiree healthcare and life insurance by $3.63 billion over the last eight years.
In 2007, the liability for retiree healthcare and life insurance was $2.31 billion and projected to rise as high as $4.63 billion by 2015. As of 2015, it was $997 million-a fifth of the original projected amount. The new savings figures come from a just-released independent actuarial report written by Gabriel Roeder Smith and Company.
When calculated in 2007, the projected 2016 costs were $337 million. In the most recent valuation, the 2016 costs were $62.3 million. In addition, as of July of 2016, the district has accumulated $127 million in a trust to pay future retiree benefit costs.
“By taking these steps, the Board ensured that we can direct more resources to educating our students and keep MPS financially sound while continuing to offer highly competitive benefits to our employees,” said Dan Chanen, Chief Human Resources Officer. “We still have work to do, but we are headed in the right direction.”
The district plans to continue lowering its unfunded liability, but does anticipate that annual costs could continue to rise with the rising cost of health care.
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Additional actions include Early Retirement Window and school changes