Police and Fire Pension Fund ratio on the rise

The Police and Fire Pension Fund saw investment returns of 11.1 percent for the fiscal year ending June 30, marking the first time the funding ratio has increased in 10 years.

At its monthly meeting Oct. 14, the pension fund's board of trustees reviewed the fund's annual actuarial report from Seattle-based consulting firm Milliman. The report shows the pensions at 47.6 percent funded up from 46.5 percent funded in last year's report, according to a city news release.

By January 2009, the roughly $295 million pension fund was underfunded by nearly $200 million, according to Springfield Business Journal coverage.

Collection of the 3/4-cent pension fund sales tax began April 1, following its approval by voters last November. The report reflects $1.55 million deposited into the fund from the sales tax, but it does not include approximately $4 million collected in July and August since the city report typically lags 60 days behind actual collection, the release said.

The city also provides money for the fund. Last year, the city's contribution equaled 52 percent of payroll but has been decreased to 35 percent with the passage of the sales tax.

"While not a lot of pension fund sales tax is included in this year's calculation, the small amount received is already showing signs of helping the fund," said pension board member James Gillette, an actuary for American National Property and Casualty. "This is a great sign."

Mayor Jim O'Neal added that the real impact of the sales tax will be shown in next year's report.

"However, it already shows the wisdom of the Springfield community in passing the pension sales tax," he said in the release.

The annual report also reflects the one-time impact of the $13.3 million telecommunications settlement that was deposited into the fund prior to passage of the sales tax, according to the release.[[In-content Ad]]