City Council approves minimum pension obligation
City Council voted unanimously Thursday to approve a $5.1 million minimum pension obligation for police, fire and general government employees in 2021.
The retirement costs are $757,918 more than this year.
“Every year we are required to pay the minimum amount,” said Councilwoman Liz Miele.
She noted how the city is required to pay an existing mortgage city forebearers left.
“We are sort of playing catch up,” Miele said.
This year, she added, the city is “hobbled further” due to a stock market underperforming.
During the upcoming proposed budget talks, city officials could decide to put more money into the pension obligation but with “money tight” and it never seems there is the “political will” to do it, she said.
The state has not released what the aid package to the city will be to offset the $5.1 pension.
“We budgeted $1.25 million,” said Joseph Pawlak, city interim finance director.
If that amount or near it is received the cost for pension obligation would drop to slightly more than $3 million, he said.
City pensions are not fully funded. They are in funded into the 80 to 85 percent range, he said.
The minimum municipal obligation is an annual cost that must be approved by Sept. 30.
Increases were blamed on investment losses and assumption planning and not meeting assumed interest rates, Pawlak said.
Cost increases also were attributed to retirements higher than expected and language in an insurance COLA that has resulted in a fire department grievance, he said.