To: Pension Recipients
From: Bill Stefka, Administrator
Date: May 29, 2012
Re: Actuarial Valuation Results/Pension Fund Update
The results of the 12/31/11 actuarial valuation of the plan are now in. The plan is actuarially sound being 87% funded with a 20.75 year amortization period. Although this was good news, the plan could not afford an across the board cost-of-living adjustment for all of our retirees.
The pension board has had input and discussions with ARFFA (the Austin Retired Fire Fighters Association) who presented the recommendation that if a COLA was not affordable for everyone, then the possibility of raising the minimum monthly pension to some of our long-time retirees and widows should be explored being 18 years when that was last reviewed (1994). If affordable, this would at least be a way of helping some of our widows and retirees, rather than do nothing at all.
As a result of these efforts and actuarial review, the pension board has approved an increase in the monthly pension benefit up to the amount of $2,000.00, effective July 1, 2012, for all currently retired firefighters and the widows of deceased firefighters who took normal or disability retirement, or who had died in service prior to 1994.The last adjustment of this type was in 1994 when the minimum monthly pension benefit was increased from $1,000.00 to $1,200.00. This increase shall apply to our pension recipients who were on the rolls in 1994 when the last adjustment of this type was approved and whose current (gross) monthly pension benefit is less than $2,000.00. This increase will become effective with the July 2012 retiree payroll which is payable July 25, 2012. The total dollar amount of this adjustment for all retirees and widows affected will be less than $8,500.00 per month. The actuary noted as a result of this increase, the plan will remain actuarially sound. The amortization period would move from 20.75 years to 20.91 years and it would not impair the plan’s financial stability, in compliance with the plan’s statute.
It was good to see many of you at the retiree BBQ earlier this month! If you have any questions, please contact our office.
William E. Stefka