North Castle retirees to pay benefit costs

Split board decision to go into effect in September

 Jul 7, 2012 ARMONK — North Castle retirees will lose their current vision and dental benefits and must begin contributing to their health care costs under a plan narrowly passed by the Town Board last week.

The switch, approved 3-2, will cost the average retiree about $62 per month. The town has about 20 retirees who will be affected by the change, and who are apparently considering legal action over it.

Supervisor Howard Arden said the plan will save about $17 million in the long-term, with an initial savings of about $100,000 this year. He said he’s not trying to burden retirees, but something had to be done to curb runaway insurance costs.

An actuarial study of North Castle in 2009 uncovered $150 million in unfunded medical liabilities, Arden said.

“This was an unsustainable process,” he said. “Something had to give, and we’re just doing it.”

The vote last week also raised the town’s retirement age from 55 to 62 and set in motion a plan that will have each town employee contribute $4 per hour to a medical fund they can access upon their retirement.

The average employee will accrue about $200,000 that can be used for post-retirement medical expenses, Arden said.

But the supervisor’s critics say the switch unfairly takes away the benefits employees and retirees have come to count on.

“One of the biggest pieces to me that was fundamentally wrong was to help our current budget by putting it on the backs of the people who no longer work for the town,” board member Michael Schiliro said. “We’re a strong enough town financially and a town of good people… it runs against who North Castle is to do something like this to the folks that have come before us.”

Given the average age of the current retirees and life expectancies, Schiliro said people would have to “live to 114” to create the kinds of savings the supervisor envisions. Schiliro estimated the change will only save the town about $30,000 annually and could expose North Castle to costly litigation.

Arden and Town Board members John Cronin and Diane DiDonato Roth voted in favor of the plan. Schiliro and board member Stephen D’Angelo opposed it. 

When he took office last year, Arden made a point of lowering the supervisor’s salary from $110,000 to $50,000. He said these new cost-cutting measures go hand in hand with that pledge.

“I’m putting my money where my mouth is,” he said.

Arden said he wants to prevent a situation like the one North Castle has currently, where two employees who worked a combined 10 years for the town have received a combined 70 years of medical benefits.

“I think those facts should be counting their lucky stars that they’ve had this frankly overly generous benefit for many, many years,” he said. “Where do you draw the line?”

A group of the affected retirees have retained Albany-based lawyer Ronald Dunn, who spoke at the Town Board meeting, but no lawsuit has been filed. Dunn did not return a call for comment by press time.

Though the measure passed and is town policy as of July 1, the board must give all employees 60 days notice of the changes. Realistically, the measures won’t take effect until September, Cronin said.