Mt. Vernon Register-News

Opinion

December 25, 2013

Pension data eye-opening

Editor:

On Dec. 7, I submitted a letter to the editor concerning the city of Mt. Vernon’s proposed increase in property taxes to meet its financial obligation to the Police and Fireman’s Retirement funds. Since the letter was printed by your newspaper, I have had several telephone calls concerning the subject, including a call from a city council member who asked if I would be willing to meet with him, the city manager and the chief of police to hear the city’s position on this matter.

I agreed to the meeting, and went to city hall three days later. Now knowing what to expect, I was pleasantly surprised that I had not been summoned to get a “chewing.” Instead, they wanted to explain to me the problems the city was facing with both the Police and Firemen’s Pension funds.

The city manager began the meeting with an overview of both pension funds. Both funds are controlled by two local boards, the Police Pension Board and the Firemen Pension Board. Although the boards are locally controlled, they must operate within certain parameters established by state law.

Both boards have five members. Three members of each of the two boards are selected by patrol officers and firemen (two from the active ranks and one from the retiree ranks) for their respective funds. The city, on the other hand, appoints two members to each board. Such an arrangement gives control of the two boards to the employees working for the city and not the city council.

To continue, state law dictates how monies are generated to support the two funds used to pay the retirement benefits. First, each police officer and each fireman must contribute 9.91 percent of his salary to his respective fund. Second, the city must also contribute monies to the two funds. Unlike the officers’ contributions, which are fixed by law, the city’s contribution will vary each year depending on what is needed to fully fund retirement obligations.

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