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Work Session   Item #:
Work Session Meeting
Public Safety Retirement Benefit Review
Work Session: 10/05/2017
At City Council's request, a review of the Employees' Retirement System (ERS) of the City of Danville, Virginia was completed by Boomershine Consulting Group, L.L.C. The purpose of the review was to determine the long-term effect on ERS' sustainability and the projected costs of providing enhanced retirement benefits to uniformed Police and Fire employees. Greg Stump from Boomershine Consulting Group presented options on April 4, 2017. Mr. Stump will review these options with Council again at the October 5, 2017 Work Session.
The Employees' Retirement System (ERS) of the City of Danville, Virginia is a defined benefit retirement plan that began in 1946 for the purpose of providing retirement, disability, and death-in-service benefits to regular, full-time employees of the City of Danville. The System is governed by the provisions of Chapter 32 of City Code and ordinances made by City Council. Funding for the System comes from employer contributions paid by the City and investment income. Each year, with the annual budget, City Council is provided recommended contribution rates from the Board of Trustees to adopt for the next fiscal year. Recommendations are made with a goal of maintaining ERS on a sound financial basis. The recommended contribution rates for ERS in FY2018 were 8.027% for General Employees and 12.806% for Public Safety Employees. The actual adopted rates for FY2018 were 7.659% for General Employees and 7.448% for Public Safety Employees, both of which were lower than the recommended rates. ERS funds are separate from other City funds and are invested and administered solely in the interest of the members, retirees, and beneficiaries of ERS. ERS is currently funded at 99%.
ERS covers two employee groups: (1) General Employees and (2) Public Safety Employees (uniformed Police and Fire). The current operational provisions are the same for both groups of employees; however the benefits are different. Public Safety employees have a higher retirement benefit from ERS because they do not participate in the Social Security System. Uniformed Public Safety employees have expressed concerns with their ERS retirement benefit. In an effort to address these concerns, the plan was studied to determine overall impact and cost of providing more enhanced benefit options to uniformed Police and Fire employees. The options reviewed were selected to make the system more competitive with the current Virginia Retirement System. Any change to ERS will have a financial impact on the City budget and will impact the overall sustainability of the retirement system. The work session presentation will review the options studied and the financial impact of each.
Police and Fire Pension Benefits Study
April 2017 Presentation
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