The Funding of Our Officers’ Pensions

This post comes to us from Keep the Winfield Police

One of our elected officials had stated many times that our police officers pension fund is only 45% funded. We decided to look at what it means to be funded, when you are required to be funded as a pension program as well as what the current funding level actually is. We found some interesting information in the two reports (CAFR and Actuarial Valuation) mentioned in our previous entry.

Our officers pension fund is not 45% funded, it is actually 50.74% funded as of the end of the report.

Our funding ratio has gone down almost every year since 2002. The funded percentage each year is as follows (approx):

02: 78.1%     ’03: 61.93%    ’04: 54.58%    ’05: 62.13%    ’06: 57.78%

’07: 56.84%    ’08: 54.0%    ’09: 46.93%    ’10: 50.14%    ’11: 50.74%

The police department has seen a reduction in police employees over the last few years which reduces the pension liability, which led us to look for some contributing factors that might help explain the reduction in the funded percentage. You obviously have market issues and so forth, but there are additional factors. Let us first say that the officers contribute their portion every single time they get paid and do not miss because it is taken out of their pay directly.

There is a section in the report that shows the percentage of the required yearly payment a municipality makes toward their obligation, here is the result from 2005 to 2010:

Year                % of required paid

2005                 91.8%

2006                 99.94

2007                 94.75

2008                 85.19

2009                 121.44

2010                 89.98

As you can see, there is a pattern of under paying each year and while there was a big payment one year, they were roughly 17% short. Not only short on the contributions, but also all of the money that would have been made on those contributions, compounded. That isn’t the fault of the police officers.

HERE IS ONE OF THE BIGGEST OMISSIONS SO FAR! All of the discussions about being under funded, all the money needed to make the pension fully funded. What they forgot to tell you all is this: The requirement to be fully funded is actually a requirement to be fully funded by the year 2030.

Yes 2030, that provides a little more perspective than what has been given to you. Why the need to leave out such a small but significant piece of information? Information, disinformation and omissions, it all appears to be purpose driven.

About Positive on Winfield

Positive on Winfield is a blog with articles on local issues, local events, and local interests in Winfield, IL. Positive on Winfield is the blog website of the local civic action group, Winfield United for a Better Community.

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