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~ Representatives from Milliman, Inc., a financial firm hired by the City of Springfield to perform an actuarial valuation of the Police Officers' and Fire Fighters' Retirement System, provided an update to the Police-Fire Pension Board on Thursday, Oct. 10.
According to the preliminary report, the self-funded pension plan has reached a funded status of 94.8%, a significant increase from its low point of 34% in 2009. This funded status is one of many metrics used to assess the health of a retirement plan and make future projections.
Tony Kelley, pension administrator and former firefighter, stated that most financial advisors consider a funded status of 80% to be healthy. He also added that the plan is now at the "gold standard level" and is close to being fully funded. Kelley attributed this success to wise investments and the support of the ¾-cent sales tax implemented by Springfield citizens in 2009.
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The original police-fire pension plan was facing severe underfunding before the sales tax was implemented. The tax has since been renewed twice and will continue until March 2025. Police officers and firefighters who are part of this plan contribute a portion of their pay towards their retirement, while the City contributes approximately $5.4 million annually from general revenue. It is worth noting that this self-funded plan has been closed to new members since 2006, with new hires being enrolled in the state's retirement plan (LAGERS).
All revenue collected from the sales tax since its implementation in April 2010 has been directed towards funding the pension plan for police officers and firefighters. These monthly deposits have been closely monitored by the Citizens' Tax Oversight Committee.
Mayor Ken McClure emphasized that providing a competitive retirement plan for police officers and firefighters is crucial as they do not receive Social Security benefits. He expressed his gratitude towards citizens for supporting this effort and acknowledged the hard work of volunteers on the police-fire pension board and pension manager Tony Kelley for managing investments effectively.
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Despite the positive news of a healthy funded ratio, it is estimated that an additional $3.5-$6 million per year will be needed to fully fund the remaining pension liability in the coming years. To address this issue, Mayor McClure has proposed an initiative on the Nov. 5 ballot that includes an increase in pay for police officers and firefighters, as well as capital improvements in line with the City's Forward SGF comprehensive plan. Question 1 on the ballot asks voters to consider replacing the original sales tax with a new one that will not increase the overall sales tax rate. If passed, customers would continue to pay ¾-cent for every $1 spent.
The Milliman Report presented to the Police-Fire Pension Board and the Actuarial Valuation Report are available for public viewing. The City of Springfield remains committed to ensuring a secure retirement for its police officers and firefighters and will continue to work towards fully funding their pension plan.
According to the preliminary report, the self-funded pension plan has reached a funded status of 94.8%, a significant increase from its low point of 34% in 2009. This funded status is one of many metrics used to assess the health of a retirement plan and make future projections.
Tony Kelley, pension administrator and former firefighter, stated that most financial advisors consider a funded status of 80% to be healthy. He also added that the plan is now at the "gold standard level" and is close to being fully funded. Kelley attributed this success to wise investments and the support of the ¾-cent sales tax implemented by Springfield citizens in 2009.
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The original police-fire pension plan was facing severe underfunding before the sales tax was implemented. The tax has since been renewed twice and will continue until March 2025. Police officers and firefighters who are part of this plan contribute a portion of their pay towards their retirement, while the City contributes approximately $5.4 million annually from general revenue. It is worth noting that this self-funded plan has been closed to new members since 2006, with new hires being enrolled in the state's retirement plan (LAGERS).
All revenue collected from the sales tax since its implementation in April 2010 has been directed towards funding the pension plan for police officers and firefighters. These monthly deposits have been closely monitored by the Citizens' Tax Oversight Committee.
Mayor Ken McClure emphasized that providing a competitive retirement plan for police officers and firefighters is crucial as they do not receive Social Security benefits. He expressed his gratitude towards citizens for supporting this effort and acknowledged the hard work of volunteers on the police-fire pension board and pension manager Tony Kelley for managing investments effectively.
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Despite the positive news of a healthy funded ratio, it is estimated that an additional $3.5-$6 million per year will be needed to fully fund the remaining pension liability in the coming years. To address this issue, Mayor McClure has proposed an initiative on the Nov. 5 ballot that includes an increase in pay for police officers and firefighters, as well as capital improvements in line with the City's Forward SGF comprehensive plan. Question 1 on the ballot asks voters to consider replacing the original sales tax with a new one that will not increase the overall sales tax rate. If passed, customers would continue to pay ¾-cent for every $1 spent.
The Milliman Report presented to the Police-Fire Pension Board and the Actuarial Valuation Report are available for public viewing. The City of Springfield remains committed to ensuring a secure retirement for its police officers and firefighters and will continue to work towards fully funding their pension plan.
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