The city of Bristol may be the only municipality in the country that has an overfunded pension plan for its employees that's got enough surplus cash to shift some of it pay for retiree health care.
City Comptroller Glenn Klocko said today he's checked with all the bond rating firms, which keep tabs on municipal finances everywhere, and none of them know of another city that has such an excess in its pension fund.
The city has about $500 million socked away, at least $100 million more than it is projected to need.
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Copyright 2010. All rights reserved.
Contact Steve Collins at scollins@bristolpress.com
23 comments:
Hey, let`s raid the cookie jar and hope all is well DOWN THE ROAD.WHO CARES ABOUT TOMORROW THAT`S WHAT IS WRONG WITH THIS GOOD OH U. S. A
Glenn,
Do you have that in writing?
Care to share?
If we are so unique I would think that this would be a story in many financial publications and sections!
Steve,
It's funny now this thing keeps popping up every couple of months.I think the real question here is what is it going to cost the city to give the unions to save approx. 2 million a year and how much does the city need to start putting into the fund each year, considering they don't put any money in now?
4:52, WHAT? SAY THAT AGAIN.....
please...leave the Fund alone. We know from recent experiences how quickly the market can do precipitous dives.
Although there may be legal ways around the wording in the Charter regarding the use of the funds, why manipulate in this manner.As recalled it was not seen as an appropriate move, though legal.
When was the last acturial study done?Is the Comptroller looking for ways to enhance his own resume?....First in the nation, etc.? Gasp 45 says devise a way of funding...it does not say that it needs to be done immediately....there is a window of many years to accomplish that goal.
There is something funny here with Mr. Klocko's statement. The gasb 45 require that the pension funds be at a minimum of 120% funded. If we have 500 million, and we have a 20% overfunding - then we don't have enough money. As the market is already down 5% yr to date. Mr. Klocko should be more careful in his smokey mirrored statements.
And Glenn had nothing to do with the city being in such good shape, but he wants to raid the fund!
G ofigure.
How about just leaving it alone so that it can continue to do what it was set up to do, and not end up in the toilet because it was tapped into like everything else government sets up and then tanks!
Do it Do It Do IT DO IT SAVE TAXPAYERS $$$$...what a novel idea!
Who can say GASB 45?
Glenn Klocko has screwed up this entire policy issue from the beginning because he disrespected other people in the process including council people and the unions who were willing to talk. And i know this will start a war, but I will say it anyway. Zoppo had a couple of unions willing to put there money into there benefits instead of there pension for not a lot of concessions but no one would work with her. the city's loss because of personalties. too bad.
WHEN ALL THE MONEY IS GONE THEN THE TAX PAYER WILL BE ON THE HOOKS FOE 8 MILLION $ THE UNIONS HAVE OTHER IDEAS ON HOW TO SAVE THE TAX PAYER BUT THE CITY DOESN`T WANT TO HEAR IT. GO FIGURE
I see the greedy unions are WELL represented here .
And some people wonder why TAXAYERS hold ill will towards these free-loaders .
7:22 -- The city has 25 percent more than the $400 million it needs. You're doing the math wrong.
NOT mine doesn't know what he/she is talking about. The unions are the ones that are putting the money into this fund, the city hasn't contributed dime one in years.
The unions have made numerous suggestions to the city about saving money but there not listening. They only want concessions so that WARD can say he got something from the unions and he can say he's not in bed with them. GIVE THAT STATEMENT A REST!
Lets get together and find ways to save money without robbing Peter just to have to pay him back at another date.
7:22 -- The city has 25 percent more than the $400 million it needs. You're doing the math wrong.
Sorry Steve, the city doesn't own one dime of this money. It is held in trust solely for the benefit of the PENSIONERS. When will you get this thru your thick scull? Klocko is botching the opportunity to leverasge the power of these funds because quite frankly, he is incompetent. When he states that he wants to use these funds specifically to lower taxes he is violating the terms of the trust. Truth will come out in due time, stay tuned.
7:22 -- The city has 25 percent more than the $400 million it needs. You're doing the math wrong.
You are so far off it boggles my mind. Fire Dept. fund has much more than what it needs to FULLY pay for retiree health care this year, as does the police pension fund. General city pension fund is well over the 120% threshhold which would also be more than enough to pay for retiree benefits for the current year. What Klocko is keeping to himself is alot, either that or he is clueless. Either way, he should be fired.
11:33, any city losses were because of her lack of ability to work together with anyone at all, due to her lack of personality and the need for self-idolation.
If you are getting your info from Klocko he either doesn't understand how the 401h process works, he is misleading you or you don't understand what he is telling you.
The police pension is over 200% funded, as is the fire pension fund. Both could fully cover retiree health care, including any modest enhancements forever, barring the complete collapse of the financial markets. The general city retirement fund is also well above the 120% threshold and could be tapped for retiree health care payments as long as the city honors collective bargaining agreements, the language of the pension trust funds and IRS rules.
The 500 million dollar figure is the total of all three pension funds. They are combined for investment purposes only and are separate funds, with different trustees and payout rules, all defined in the charter or city code and more importantly in the collective bargaining agreements of the three groups. In order to use pension money for health care, a subaccount (401h) for each separate pension fund must be defined and established in each collective bargaining agreement. Once that is done, the city can use any over funding for retiree health care up to 100% of the cost as long as the over funding doesn't fall below the 120% threshhold, not likely to ever happen for police and fire, since the TOTAL cost for retiree health care for police and fire is under 2 million a year, and those funds have combined over funding of around 200 million, a staggering amount. Ask Klocko about these numbers, I would be interested to hear what he has to say about it.
Just because Kloko say it doesn't mean it is so.
No wonder he doesn't want to provide any information.
Too bad Ward is afraid to question him and make hime do his job.
What does Kloko care, his taxes aren't affected: he lives in Southington.
Guess Ward is to busy vacationing to worry about the needs of the city.
Mr. Ward doesn't have a clue....nor is he intelligent enough (or he is just lazy) to learn! So the department heads just talk over him, and rather than admit that he is confounded, he backs them up, to the detriment of the city!!!
Steve,
It is not the city's money. The city holds that money in trust for certain of its employees. It is not the city's cookie jar to raid.
If Glenn told you that there is $100M more in that trust than is actually needed... that is untrue. His math is fuzzy at best, and if asked, he will tell you that his figures are based upon actuarial calculations, not actual future costs. Its just an estimate.
9:53 -- Yes, of course the money is held in trust for employees.
And Klocko's made no secret of the reality that actuarial estimates are the basis of what the city expects to pay out. What else could it base that on?
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