Participants in the city of Hannibal's Police and Fire Retirement Plan will be contributing more beginning July 1, 2016.
Participants in the city of Hannibal’s Police and Fire Retirement Plan will be contributing more beginning July 1, 2016.
The adjustment will see employee contributions increase by one-half percent in each of the next six years, going from the current 12 percent to 15 percent on July 1, 2021. According to Angel Vance, city clerk and secretary-treasurer for the Police and Fireman’s Retirement Board, the change will generate approximately an additional $2,500, based on this fiscal year’s budgeted figures.
“The amounts are compounded over the five-year period, thus increasing each year,” she said. “It could also result in additional money as their contributions are based on their gross pay, which includes overtime and the possible cost of living adjustments (COLA) increase.”
The change was approved by the Police and Fireman’s Retirement Board at its Sept. 23 meeting. The proposed revision then went before the City Council at its Oct. 20 meeting, where it was approved on a 6-0 vote. Mayor Pro Tem Kevin Knickerbocker was absent.
When asked about the change to the plan, Police and Fireman’s Retirement Board Chairman Mike Benjamin reported it has the support of uniformed personnel in both departments.
Vance says the increase in contributions is being achieved without decreasing take-home pay. Vance explained how this will be accomplished.
“Police and fire uniformed members negotiated agreements with the city to be under a ‘longevity’ pay plan. With this, they are guaranteed a 1 percent increase on their anniversary date; thus 0.5 percent (effective July, 2016) will go into the pension and the other half increases their take-home pay,” she said. “There is also the possibility for them to receive a higher pay increase if the city should approve COLA, as their scales will increase by the authorized COLA amount.”
Employee contributions were last increased on July 1, 2011, when they went from 9.5 percent to 12 percent. The city’s contribution was also amended at that same time (July, 2011). Under its current agreement with members of the Police and Fire Retirement Plan the city’s annual contribution shall not be less than that of the prior year unless certain fiscal conditions are met. The city currently contributes 24.6 percent.
Vance calls the change a “proactive measure” on the part of Police and Fireman’s Retirement Board. She says the approved changes “will be crucial for the plan to sustain the impacts of the upcoming eligible retirements.”
“There are approximately 15 individuals eligible to retire. Of those 15, they are all eligible to receive a refund of their contributions. Should they all retire it would have a direct impact on the fund of over $1 million,” said Vance, adding she does not anticipate all 15 retiring this year.
The retirement plan has been revised so that police officers and firefighters hired after July 2005 are not eligible for this refund of contributions if they are entitled to a retirement benefit.
Reach reporter Danny Henley at firstname.lastname@example.org .