By Debby Woodin

dwoodin@joplinglobe.com

Joplin’s Police and Firemen’s Pension Fund Board turned down a request by the city manager to allow the fund’s membership to vote on a proposed funding change intended to make the fund more solvent.

The board and city staff members debated for more than three hours Wednesday, largely over one element of the proposal: allowing the city to cap increases in annual payments to the fund at 3 percent in the event that the municipal government would experience an economic crisis.

The board ultimately decided to ask its membership for an advisory vote on the proposed plan without the cap provision.

Several trustees and their attorney, Dan Tobben, of St. Louis, contended that the city should agree to finance the plan at rates recommended by a financial expert or actuary every year.

City Manager Mark Rohr, Finance Director Leslie Jones and Mayor Jon Tupper contended that the city should be protected from having to make an extraordinary contribution that the city might not be able to afford if a serious economic challenge arose after the plan is solvent.

The fund is considered precarious because at current levels of city contribution, the fund has only enough money to pay out about 58 percent of the benefits it is obligated to cover, according to figures of the plan’s financial experts. State law now requires that plans be funded at 60 percent, and the preferred level of funding is 80 percent.

The city now pays in an amount equal to 17 percent of the cost of fire and police payroll. Employees contribute 18.08 percent, but they get that back in a lump sum when they leave employment or retire. They can retire after 20 years of service and begin receive benefits. But, that 20-year retirement benefit and the city’s failure in past years to make sufficient contributions have reduced the fund’s solvency.

Rohr told the board that the proposal, advanced by a committee headed by him that included police and fire employees, would require the city to put in the actuarial-recommended amount each year, except to limit the increase to 3 percent in one year to offer the city “downside protection.”

Board member Charla Geller said she is concerned about agreeing to such a cap because retirees need to know the funding is going to be there to pay their benefits even if there is an economic downturn or crisis.

Rohr said that if the recommendation were adopted, the payment plan would be enough to finance benefits without interrupting any payments to retirees.

Tobben, the board’s attorney, advised trustees that they should not accept anything other than an agreement for funding at actuarial levels. He compared the fund to a debt, with the city’s contributions like installment payments on the debt. The board is willing to allow the city a couple of years to catch up current arrearages, he said, “but you have to go to pure actuarial funding or the debt won’t be paid off.”

He advised the board that if the membership didn’t support the funding option, the board could go back to discussing a lawsuit.

Rohr contended that if the city used any other method to fund the plan, such as borrowing money, it would be allowed to renegotiate for lower terms in the event of an economic downturn.

Board member Tom Robertson introduced at least two motions for an advisory vote that died for lack of a second or that he withdrew.

The mayor expressed frustration with the board’s indecision after he was asked whether the City Council would support the amended proposal. He said he couldn’t speak for the council, especially when the composition of the panel may change after the April 8 election.

Tupper also took the opportunity to criticize the board. “If this board has one fault, it’s that it can’t make up its mind,” he said.

Geller originally introduced a motion asking that the membership be allowed to vote on the proposal proffered by Rohr to change the plan. After Robertson said he wouldn’t vote in favor of that, she changed her motion to authorize an advisory vote, and all seven voting members approved it.

It will take some time for the city staff to prepare for the election, said the city attorney, Brian Head, and no date for holding the election was discussed.





Advisory vote



Police and fire employees will be asked to vote in an advisory election on a proposal that would change the contribution and benefits of new hires.

It would reduce the employee contribution from 18.08 percent to 10 percent, but retirees would not receive a lump-sum refund of their contribution as the current covered employees do upon retirement.

Employees who leave before retiring would get refunds. New hires could get full retirement benefits after 25 years of service rather than the current 20 years, but they could retire at reduced benefits after 20 to 24 years of service.

The city would make an initial payment of $950,000 into the fund and increase its annual contribution of police and fire payroll until the plan is solvent.