Duxbury selectmen have begun the process of searching for funding for other post-employment benefits (OPEB).

Most Duxbury employees earn a promise from their employer to help bear the cost of health care for the rest of their lives after working for the town for 10 years. Larry Stone, of Stone Consulting, Inc., gave a presentation to the Board of Selectmen at their most recent meeting on these OPEB for the town of Duxbury as of June 30, 2012. The town is not required to comply with standards for paying the OPEB, which is the cost of health care benefits current and future retirees have earned over time.

The presentation summarized a report submitted by Stone Consulting on Jan. 16, 2013, which measured the actuarial accrued liabilities associated with OPEB.

An “actuarial accrued liability” is the price attributed to benefits earned in past years. The total liability as of June 30, 2012 is $87,999,907, which is comprised of approximately $42.3 million for current active Duxbury employees and approximately $45.7 million for Duxbury retirees, spouses and survivors.

The “normal cost” is the price attributed to benefits earned in the current year. The normal cost as of June 30, 2012 is approximately $4.1 million.

The town’s last valuation of its OPEB liability was completed as of June 1, 2009. The actuarial accrued liability as of 2009 was $66.7 million, a 32 percent increase from the previous year. The normal cost in the 2009 valuation was $3.4 million, a 19.6 percent increase from the previous year.

Duxbury’s OPEB fund includes money from free cash and reimbursements from the federal government for Medicare D payments. Most cities in Massachusetts pay for post- employment medical benefits on a pay-as-you-go basis.

In his presentation, Stone explained Duxbury is self-insured, so retirees pay 50 percent of the costs and the town pays the other 50 percent.

“You are in better shape than other towns because of that,” Stone said.

The report by Stone Consulting said “the funding policy is critical to the valuation not only because it impacts the funds backing the liability but also because it impacts the discount rate that is used to calculate all of the relevant figures.”

The report said a major factor that influences the costs of OPEB is the “design of plans that Duxbury offers to retirees.” The report suggests the Town review the design of all its medical plans annually, where changes in the plans could help mitigate the impacts of the costs.

Another suggestion by the report is to take a look at the contribution levels, or the extent to which the town will subsidize the cost of the retiree benefits. Duxbury’s contribution level is much higher than other demographically similar towns. High contribution levels attract more participation, because there is less of a burden on the retiree.

The report also suggests reviewing the town’s eligibility criteria each year to be sure the criteria are in accordance with town goals for controlling costs. Duxbury currently pays for medical benefits for those who reach ten years of service even if they do not retire from the town immediately upon separation from service. This produces a higher liability for Duxbury than if the town covered only those who were ac- tually retiring from the town.

The town plans on doing a valuation every two years to track the OPEB process.