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August 21, 2014, 1:16 am
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Unfunded Liability for Springfield Police and Fire Pensions Goes Up $11.7 Million


The unfunded liability for Springfield police and fire fighter pensions combined has gone up to nearly $11.7 million, according to actuarial reports provided to aldermen by the Office of Budget and Management.

 

Alderman Joe McMenamin holding up a sign to explain the unfunded liability for Springfield police and fire pensions
Alderman Joe McMenamin holding up a sign to explain the unfunded liability for Springfield police and fire pensions

Details of the actuarial reports come just before the city council is set to discuss levying taxes to pay for police and fire pension funds.

 

Actuarial Documents:

Firefighters' Pension Fund (pdf link)

Police Pension Fund (pdf link)

 

The reports indicate the reason for most of the increase in unfunded liability is due to investment return that was lower than assumed, an issue championed by Alderman Joe McMenamin.

 

The Ward 7 Alderman has been urging the city to change the expected rate of return for fire and police pensions from 7.5 percent to a more realistic rate of 5.5 percent.

 

Mayor Mike Houston says that is a budget time discussion and his administration plans on lowering the rate of return a quarter-percent per year to reach 5.5 percent, something the mayor says will cost $1 million.

 

McMenamin says the mayor's plan is "shockingly inadequate in relation to the seriousness of the situation" and by the time it takes to reach 5.5 percent the unfunded liability would explode even further.

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