HARVARD -- Preparing for the town's ever-growing retirement burden, Harvard will set aside $425,000 in other post-employment benefits for the next fiscal year if it passes at Town Meeting.
It's the town's second year contributing to the fund known as "OPEB," which would go toward health and life insurance for town retirees.
Last year, the town set aside $250,000, but health-care savings this year allowed the town to invest $425,000, said Finance Director Lorraine Leonard.
A previous actuarial study estimated full liability at $23.3 million, recommending that 60 percent of that figure be invested over the next 30 years, she said. That would actually require an investment of about $466,000 per year -- $41,000 more than the town has planned.
But Leonard said the town's rate of investment is still very good.
"We're very close to what our actuary said he thought would be a real solid place for us to be," Leonard said.
The town is taking a preparatory step in what has become an issue nationwide, as the "baby boomer" generation retires to live longer lives than generations ago. This boom of retirees will in turn require a boom in health-care expenses.
"A lot of towns have started funding it realizing that there's no point in putting it off," Leonard said. "We're actually in a pretty good position for having put in that much for this size town."
In its five-year projection, the Finance Comittee also assumed that OPEB would be funded at $425,000 per year.
Selectman Ronald Ricci said the board agreed to the increase in the omnibus budget, although the change will ultimately be up to Town Meeting.
Ricci said the benefits are a liability that must be funded.
"Sometime in the future, you're going to have to pay the obligation and all of a sudden you're going to say, 'Gee, I should've been setting something aside for it' when it becomes 10 or 15 or 20 percent of the budget," he said.
Parts of the country are in tough shape because local or state governments could not keep the commitments they made to their employees, Ricci said.
"I think in the extreme, Detroit is probably one of the examples of people making commitments to employees that they can't keep," he said. "There's really no comparison, hopefully, between us and Detroit."
A Town Meeting warrant also includes a $10,000 request to fund an actuarial study, which uses complex calculations to estimate how much the town should set aside based on its number of current and future employees. While Massachusetts does not require towns to set up an OPEB fund, it does require all towns to report their estimated liability every two years. Harvard's last study was in 2012.