Benefits of Wisconsin OPEB Trust
The Wisconsin OPEB Trust is a turn-key solution for managing OPEB obligations. This new twist on ‘paying it forward’ can return a range of dividends:
Credit Ratings
According to a National School Boards Association publication, Standard & Poor’s Rating Agency and Moody’s Investor Service say they will evaluate OPEB obligations and plans for dealing with these obligations in determining credit ratings. State and local government agencies and school districts that proactively address OPEB obligations are expected to be viewed more favorably by credit rating agencies.
Special Education Reimbursements
In Wisconsin, the Department of Public Instruction bases Special Education categorical aid on salaries and employment benefits. School districts that establish a Fund 73 Trust for OPEB benefits and fund it as part of employee fringe benefits costs earn maximum reimbursements available under the law.
Fiduciary Responsibility
If you ‘go-it-alone’ in establishing an OPEB trust fund, the fiduciary responsibility (legal authority) for the fund rests exclusively with you. Fiduciaries bear seven responsibilities:
- Adherence to the Trust – You are expected to carry out all duties and terms outlined in the Trust document.
- Duty of Care – You are expected to show the same degree of skill and attention as any prudent investor would in a similar situation. Management decisions are judged not by the actual results, but rather the soundness of the decision-making process that led to those results. This is known as the Prudent Investor Standard.
- Duty to Make the Trust Productive – As fiduciary, you are expected to obtain returns commensurate with the terms of the trust, the needs of the beneficiaries and prevailing economic and financial conditions.
- Duty of Loyalty – As fiduciary, you must invest and manage Trust assets.
- Duty of Diversification – A fiduciary trustee shall prudently diversify investments unless the trustee reasonably determines that the beneficiaries are better served without diversifying.
- Duty to Control Costs – A fiduciary may incur only costs that are appropriate and reasonable in relation to the assets, the purposes of the trust and the skill of the fiduciary.
- Delegation of Investment and Management Functions – Trustees may delegate certain investment and management functions. The trustee shall exercise reasonable care, skill and caution in selecting an agency, establishing the scope of the delegation and monitoring the agent’s performance and compliance with stated terms of the delegation.
When OPEB funds are invested through the Wisconsin OPEB Trust, you retain responsibility for direction and oversight of the fund, but the corporate trustee assumes responsibility for administering the fund. As investment advisor, Graystone Consulting takes on a co-fiduciary role for your Wisconsin OPEB Trust fund.
| 
