High Court Rules Against Andover In Pension Case Appeal

ANDOVER, MA — Increases the Town of Andover ordered retired employees to pay for health insurance in 2016 are not lawful, according to a ruling by the Massachusetts Supreme Judicial Court that was issued Wednesday. Three retired town employees sued after the town increased the percentage they had to pay for benefits. Salem Superior Court Judge James Lang had ruled in favor the town, prompting the appeal to the state's high court.

Wednesday's ruling send the case back to the Superior Court. The retirees had argued that the town implemented the increase during a state moratorium preventing such increases. That moratorium expired last year.

Read the full SJC ruling.

The ruling comes as Andover struggles to meet its pension liabilities. The unfunded liability is between $290 million and $550 million, depending on the method of valuation. The pension liability represents future payments the town will owe current employees for pensions and retiree benefits when they retire.

"We're going in the wrong direction," Retirement Board member Tom Hartwell said at a June meeting. "We're doing a poor job of managing our unfunded liability. This rate is embarrassing."

At the time, Hartwell noted retiree benefits, which currently make up about 17% of the town's annual budget, could soon rise to account for 30% or more of the annual budget, leaving less room for spending on other town services without tax increases. Put another way, each of Andover's 17,000 taxpaying households is on the hook for about $25,000 in taxes to close the deficit.

Previously on Patch: Andover's Big Pension Liabilities Could Cause Big Budget Problems

Dave Copeland can be reached at dave.copeland@patch.com or by calling 617-433-7851. Follow him on Twitter (@CopeWrites) and Facebook (/copewrites).