The pension plan for police and fire is in adequate shape — actuarially speaking — though it is still recovering from the stock market crash in 2008, based on a report to the City Council this month.
Investment returns of 11.2 percent last year, plus some changes the council made last year relating to the plan, helped put the plan on more sound financial footing.
The plan covers defined benefit retirement plans for more than 1,100 current and former police and firefighters.
Defined benefit means the employee is guaranteed a specific monthly benefit at retirement primarily based on years of service and end-of-career salary.
Most city employees have defined contribution plans, similar to 401k savings plans for employees with private companies.
The city government is responsible for the defined benefit retirement plan's monthly benefit no matter what happens with investments.
The city should contribute about $8.33 million next fiscal year and another $8.43 million the following year in order to maintain stability in the pension fund, based on the recent actuarial report from Cavanaugh Macdonald Consulting.
For those few who understand this complicated topic, the funded ratio for the pension plan (as of Aug. 31) was 81 percent, up from a low of 63.9 percent in 2015. That's one measure of the financial health of the plan.
Prior to the stock market crash, the funded ratio for the plan hovered between 95 to more than 100 percent.