WETHERSFIELD - A previously underfunded retirement medical benefits account is getting a $1.8 million boost, courtesy of a Medical Self Insurance Reserve Fund surplus.

       The Wethersfield Council unanimously approved the transfer of the extra funds into the Other Post-Employment Benefits Fund (OPEB), which the town is working to build over the course of a 30-year period in order to meet what is currently a $50 million liability, at its Sept. 15 meeting.

       â€�"The funding policy we put in place last year really helped provide the guidance for transfers like this,” said Councilor Donna Hemmann at the meeting. â€�"It’s nice to see that it’s growing faster than we anticipated.

       That’s a different picture than what the Council was looking at in February 2013, and the OPEB liability was $65.5 million, according to a 2009 GASBY 45-mandated audit that was based on the cost of retirement and health care benefits and the life expectancy of retirees, amongst other factors.

       The problem then was that retirement medical benefits have been historically covered through a combination of $2.5 million in annual pay-as-you go expenditures and a $3.7 million reserve accumulated through town employee contributions.

       The OPEB account did not receive more funds before 2009 because it was not required by law until GASBY 45 came into effect, then-Wethersfield Finance Director Susan Smith said last year.

       So the Council had to establish a policy to bolster the OPEB fund. The plan was to start with a 2014 general fund allotment of $200,000--a contribution that would increase by that amount in each of the following years. That means $400,000 will be added in 2015, and then $600,000 the following year.

       But that wasn’t all. Part of the OPEB funding policy was to allow transfers of any surpluses generated within the Medical Self Insurance Reserve Fund.

       â€�"That points to the Medical Self Insurance Fund as a potential source of assets,” said Wethersfield Finance Director Michael O’Neil.

       As long as it does not bring the Medical Self Insurance Fund balance below 10 percent of historic claims, per the policy regarding that account that was established in 2009. When the fund was audited last June, the balance came out to more than $3.9 million, with medical benefit claims for the 2013 fiscal year over $6.4 million, according to O’Neil.

       Under the Medical Self Insurance Fund policy, the town could transfer up to $3.3 million into the OPEB account and still be at the minimum 10 percent for historic claims within the former in order to â€�"adequately fund the Town and Board of Education’s potential loss exposure,” O’Neil wrote in the Sept. 15 Council meeting information packet. His proposal was to move $1.8 million. The $1.2 million that will remain in Medical Self Insurance Fund will be more than enough, he said.

       â€�"That’s 33 percent,” O’Neil told the Council during a discussion held prior to the vote. â€�"So it’s ample reserves. I think 10 percent is enough, but it’s always nice to have more.”

       The balance in the OPEB fund is currently around $8 million, according to O’Neil.

       An updated actuarial assessment of the town’s liability was updated last July to reflect the liability reduction from $65.5 million to $56.8 million, according to O’Neil. Since that includes the $8 million already in the OPEB fund, Wethersfield’s actual liability is around $50 million, he said.