Health & Fitness
Fiscal Challenge of Unfunded Liabilities
West Hartford is a great place to live and raise a family. That’s why we live here. But we face fiscal challenges that must be addressed to keep our town affordable for all of us. These challenges include our approximately $300 million in unfunded pension and healthcare liabilities.
The unfunded portion of the pension is approximately $190 million. The town contributed $16 million this year and the contribution amount will increase each year thereafter. Assuming annual required contributions and an overly optimistic 8.125% rate of return, the unfunded liability is actually projected to increase in the near-term. At the same time benefit payments last year were approximately $21 million, which is $5 million more than the annual contribution.
The retiree health care fund is likewise significantly unfunded. The unfunded portion of the retiree health reserve is $107 million. The town contributed $8.6 million this year to this fund, but paid out $9.2 million in claims. Even assuming increasing annual contributions, the long range forecast for our pension and healthcare obligations do not look good.
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We cannot tax our way out of this problem. This problem already impacts the quality of life we enjoy and it will only get worse if we do not make long-term changes. To do this, we need to bring our town contracts more in line with the private sector. If elected to the Council I look forward to working hard to address these fiscal challenges and keeping West Hartford affordable.