Market performance at nearly twice projections pushed the combined value of the city’s pension plans to more than $402 million for the first time and reduced the level of unfunded plans, according …
This item is available in full to subscribers.
We have recently launched a new and improved website. To continue reading, you will need to either log into your subscriber account, or purchase a new subscription.
If you are a current print subscriber, you can set up a free website account by clicking here.
Otherwise, click here to view your options for subscribing.
Please log in to continue |
|
Market performance at nearly twice projections pushed the combined value of the city’s pension plans to more than $402 million for the first time and reduced the level of unfunded plans, according to the actuarial report released by Mayor Scott Avedisian yesterday.
“This is very positive,” Avedisian said.
The report by Gabriel Roeder Smith & Company, which was shared with the City Council, finds that returns on pension investments in the city’s four plans averaged more than 15 percent for the last fiscal year. Investment earning had been projected at 7.5 percent.
Actuary Joseph Newton was scheduled to appear before the council last night to answer questions about the report.
The market’s strong performance is part of the picture why the weakest of city plans – the closed Police and Fire 1 plan – saw an increase in its funded liability from 20 to 24 percent. Retiree increases in the plan are linked to salary increases to active police and fire members. Municipal employees have not received a raise in the past three years, thereby reducing the projected unfunded liability and eliminating what actuaries forecast as a “spike” in city contributions if it was to adhere to a schedule to fully fund the plan by 2036.
The analysis finds that, of the four plans, the Fire II plan is closest to being fully funded at 92 percent. Police II is 88 percent funded and the Municipal plan is 73 percent funded. According to GRS, plans funded at 80 percent or more are considered healthy and financially stable.
According to a release issued by the mayor, the total unfunded liability for all pension plans decreased by $50 million, with $36 million of that being in Police and Fire I.
Avedisian glowed in the revelation that the pension investments out-performed the assumed growth of 7.5 percent. In response to critics of the locally run retirement board that oversees investments for the Municipal plan, Avedisian said, “This is not bad for people who don’t know what they’re doing.”
Municipal plan investments saw a 15.7 percent increase from investments.
The mayor said he does not expect that the report will result in improved bond ratings because rating agencies only look at the city when it is entering the bond market. He didn’t think that would be anytime soon, but it could happen if the council and voters approve additional debt. That could be a possibility if a bond for road repairs is approved.
3 comments on this item Please log in to comment by clicking here
meepbobeep
Just as an FYI: 80% funded does not mean a pension plan is “healthy”
See this brief from the American Academy of Actuaries:
http://www.actuary.org/files/Pension%20Funding.pdf
Wednesday, March 18, 2015 Report this
.
lies
Saturday, March 21, 2015 Report this
StaciaClueless
Stacia Petri Huyler is a no good, low life sleezeball. She has provided zero insight into how she would change the problems she says exist. It's embarrassing for her husband (he already regrets marrying her). It didn't take long for him to realize how downright idiotic she is, and the rest of warwick is catching on and seeing through her BS too.
Friday, March 27, 2015 Report this