The town manager recommended paying the more than $50,000 to avoid future costs.
By Gail Geraghty
Staff Writer

OXFORD – What amounts to a clerical error from years ago may cost the town $50,000 to cover its employer liability with the Maine State Retirement System.

The bill represents interest on, and missed employee contributions to the system since 1996.

Town Treasurer Sharon Jackson said that even though voters that year decided to no longer offer Maine State Retirement System benefits to its employees, the town continued to be a member because it did not send a certified letter announcing its decision.

Two or three years ago, an employee inquired about the town’s system status, and it was found to still be active. Since then, eight employees so far have opted to buy back their benefits, so they can receive them when they retire in addition to their Social Security benefits.

At Thursday’s selectmen’s meeting, Town Manager Mike Huston recommended paying the $50,138.61 calculated as owed by the retirement system at a special town meeting soon to avoid future interest costs.

But Selectmen Roger Smedberg and Dennis Sanborn still doubted whether the town was liable for all those missed benefits and wanted the town’s attorney to look into the matter.

“The state might have made a mistake,” said Sanborn.

“The options we have are fairly limited,” Huston said. He recommended taking the money from the town’s unreserved surplus account. Voters agreed to some limited funding for retirement system benefits for current employees at the March town meeting, but it is not enough to cover the unfunded amount, he said.

Huston said the town could set up a payment plan with the system but would pay more in interest charges that way. If payment is not made by June 23, interest on the debt will continue, retroactive to Dec. 12 of 2002, the date Maine State Retirement System made the calculations.

Smedberg said he thought the town’s vote was clear in 1996, that residents wanted to only pay Social Security for its employees and not Maine State Retirement benefits. But Jackson said the lack of a certified letter to the state retirement system made the vote null and void.

Jackson said that since employees have learned they can opt to be part of the system, they have been paying into the system, and also have been paying interest on their own to buy back time dating to their hiring date.

Selectmen agreed that if a special town meeting appears to be the best option, the meeting should make it clear that only current employees, and not new hires, would be eligible for retirement benefits.

The board also agreed to take the issue to the Budget Committee, where that board could also, if it chose to, resubmit a request for highway trucks recently rejected by voters.