The Queen Anne’s County Commissioners voted to include the in-development MACo OPEB Trust as an investment option for their long term contributions toward retiree health care. OPEB, meaning “other post employment benefits” beyond traditional pension obligations, are long term costs that show up on government books as liabilities. Under state law, counties may place current payments or reserves for these obligations in Trust as long term investments, allowing a wider and more favorable investment landscape than that available for traditional public funds.
From coverage on MyEasternShoreMD.com:
The county’s OPEB fund, close to $2 million this fiscal year, is currently being pooled with OPEB funds from Kent County, the Queen Anne’s County Public Library and the county’s Board of Education. According to Seeman, those funds are held in what essentially amounts to a checking account, earning very little interest.
By joining the trust fund that MACo is in the process of creating, the money from the county’s OPEB account can be invested in a variety of securities, allowing greater earning potential.
“When you have this type of investment, usually what’s projected is a 6 to 8 percent annual return,” Seeman said. “Ultimately, if we reach our goal after 10 years, we’d have about $8 million.”
The St. Mary’s County Commissioners have formally adopted the Trust document through formal action, while both Allegany and Talbot County have designated staff representatives to act on behalf of the county to help in the Trust’s development.
For more background on the MACo OPEB Trust, see previous Conduit Street coverage: MACo Developing OPEB Trust For Long-Term Investments