A recommended decrease to the pension fund's assumed interest rate would bring with it a larger municipal contribution, an increase that would be too much to bear in one year.
Now it's up to the Town Council to decide whether to lower the interest rate assumptions and assume a higher contribution rate.
The town's investments have performed well this year, according to Rebecca Sealmon, a consultant working with the Retirement Board. But the town's planned $485,000 yearly increase in contributions to the fund won't be enough, she said.
Currently the town assumes an 8.25 percent return on investments, but the proposal is to decrease that estimate to 7.5 percent. Town contributions would have to make up the difference.
Over the course of 10 years, the town's contribution could double, from $2 million now to $4 million then in order to fully fund the pension account that pays benefits to retirees, she said.
And that could affect the town's ability to maintain its current level of services, according to Councilman James Sima.
But it's necessary, Town Manager Michael Milone said.
"The rating agencies look favorably on towns taking proactive approaches such as increasing our contribution," he said. "It's when you underfund that it is looked on negatively by the rating firms."
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