Our former chief financial officer was a city appointee to our police and fire pension board.
The last item on the Tuesday, July 22, 2014 city council agenda is hopefully her last gift to us. The item allows the council to discuss and take action on the 2014 actuarial study for both the policeman’s and firemen’s pension funds.
The firemen’s fund is underfunded by $114 million. In 2012 they were underfunded by $108 million so it looks like we are falling behind about $3 million each year.
It looks like there are 871 people being paid out of the fund at the average rate of $61,851 per year, each.
While the payout rate seems high compared for example to social security, be aware that the current contribution rate is 15.28 percent for the employees and 18.5 percent from the city.
The unfunded amount in the police fund is just short of $194 million at January 1, 2014 whereas it was $174 million on the same date in 2012. Once again we are falling behind, in this case to the tune of $10 million each year.
The annual payout for the 1,052 people receiving checks is $67,317. Policemen pay 13.89% of their salary into the fund while the city contributes another 18.5%.
Further in the hole
Our former chief financial officer was only one of the voting members of the board. However, the “crazies” probably thought she had a responsibility to the taxpayers to let us know what has been happening and get the numbers in balance.
Most private employers match the roughly 7.5% that the average working person is required to put into social security.
The city’s 18.5% is more than twice what private employers are required to contribute.
Why? Some will say that our uniformed public safety employees are underpaid on an annual basis. Maybe they are. Making up for it in retirement is not the answer.
Why don’t we put our new hires into the regular retirement system that most of us must participate in and pay a competitive wage to them during their working years? What is a competitive wage? Why not let the market decide like we do with private employers? If private employers cannot hire the people they need at the pay rate they are willing to pay, they raise the pay rate until they can.
Wouldn’t it be better to have one retirement system for all of us?
We don’t know if our prior chief financial officer will continue to sit on this pension board. I suspect that she will be replaced when her term expires.
Then we only have to worry about what she does or does not do at EPISD.
We deserve better