RECENT ACTUARIAL VALUATIONS: Suburban Melrose, Rural Montague Retirement Systems

JAN 2007 - Periodically, usually every three years, each retirement system is required to undergo an actuarial valuation of their retirement system. This valuation is done by an actuary of the board’s choosing or by PERAC’s actuarial unit headed by Jim Lamenzo.


The valuation report consists of an update on the system’s funding
schedule and a 25 or 30 page financial/data breakdown of every area
relative to the system.
Although the reports require the same data, we especially like PERAC’s
breakdown which includes charts of salary and pension averages by
individual age brackets. This allows our members to somewhat compare
their retirement system’s pensions with those of other systems. It is
also important that the report shows a breakdown of salaries which, of
course, have a major impact on pensions.
This month we are utilizing PERAC’s most recent data, which includes the retirement systems of Melrose and Montague.
Melrose, a middle-class city of 27,000, is about 10 miles north of
Boston. It has a work force of 444, all of whom are members of the
Melrose Retirement System. Despite a new trend of people working to a
later age once again, there is a noticeable drop-off in the number of
employees over age sixty in Melrose.
“Group 4 employees (police, fire) reach their maximum pension in their
50s,” explained J.P. O’Neil, a retired fire lieutenant and chairman of
the Melrose Board. “Most of them retire when they reach max. Our
workforce had also been reduced. The number of firefighters is down
from 74 to about 50,” O’Neil added.
Melrose retirees have an average pension of about $17,422. “There are a
number of cafeteria workers and teaching assistants who were low-paid
and bring the average down,” said Retirement Board Administrator
Barbara Wells. “And of course, survivors are included… their pensions
are usually much lower.” But every community has a category of similar
workers that skew the average and on the whole Melrose retirees receive
pensions that are similar to neighboring communities. Also, it should
be clarified that teaching assistants are not members of the Teachers’
Retirement System.
“There isn’t much industry in Melrose, we are a commuter community,”
said Wells, a lifetime Melrose resident. When asked about property
taxes she said her taxes for a five-room cape were “about $3,400 a
year.” While this sounded very reasonable, Assistant Administrator Jean
Forsey, also a Melrose resident, chimed in that her taxes were “about
$5,600.” With that, we quickly dropped the subject of taxes.
Out in Western Mass., the small town of Montague, population 8,443, is
the least populated town in the state to have its own retirement
system, edging out Adams, which at last count has a population of 8,508.
With an average pension of $13,295, Montague is in the same ballpark as
other small communities in Western Mass. Neighboring Greenfield, the
only other town in Franklin County to have its own retirement system,
has a slightly higher average pension of $14,118.
 “It’s true that we’re small, but we have an excellent retirement
system and our investments (PRIT Fund) have done very well,” defended
Tina Schneider, the Montague Retirement Board Director.
Montague’s work force consists of 219 employees, with an average salary
of $24,791. At one time, this was a busy industrial town, but the big
mills have closed and the industrial base is much smaller. Town jobs,
although lower in salaries than Eastern Mass. cannot be scoffed at in
Surprisingly, unlike most communities its size, Montague has permanent
firefighters. “Our town consists of five small villages. In Turners
Falls, the largest village, there is a fire station with permanent
firefighters,” noted Schneider.
Connie Galvis is a retired director of the Montague Housing Authority
and a member of the Montague System. She lives in the village of
Turners Falls, which she calls the “center” of Montague.
“In a small town like ours, all the Board members are like neighbors,”
Galvis said. “When I applied for retirement I was given all kinds of
personal attention and the board and staff wouldn’t let me out the door
until they were certain I didn’t have any more questions. Every retiree
receives the same type of royal treatment… We are fortunate to have our
own Board.”
“I agree with Tina Schneider and Connie Galvis,” said Association
President Ralph White. “There is much to be said about small rural
Boards and the service they provide. While most small towns belong to a
county or regional system, which also adds a personal touch, the
Montagues of our state are a throwback to an earlier time that should
be preserved.”