Greenwich pension fund debt could exceed $16 million
February 7, 2012 by James
Greenwich taxpayers may be forced to pitch in at least 15.5 million to help the city meet its pension fund obligations. Concerns over pension fund contracts in Greenwich have been an issue for years. The problem appears to be getting worse as the deficit is projected to reach the highest level to date in the upcoming fiscal year.
An increase in taxpayer contributions would help return the stagnant fund to solvency, the town’s actuarial service noted in a preliminary report.
Plummeting stock values are largely to blame for the drop in available pension fund dollars. The fund lost more $70 million from 2008 2009. During the same period contributions rose from $ 6.6 million to $14.5; far less than what’s needed to recoup the loss.
The dismal protections have not been finalized and may improve in the coming months due to factors such as the expected rate of return of the $294 million pension found. The anticipated $15.5 million pension fund contribution assumes an 8 percent annual rate of return, minus 3.5 percent inflationary pay increases to municipal workers, explained Retirement Board member Larry Simon. Postcard printing may be a useful tool to notify local taxpayers of the anticipated upcoming tax increase.
The city’s pension fund pays out about $21 million annually to 1,070 former city workers. Retired teachers are not covered under the fund. Pension checks are generally 2 percent of a worker’s final salary times the number of years they were employed by the city. From time to the city has increased pension payments to help cover rising cost of living expenses.