At the City Council meeting Monday, June 13, a measure will be introduced to merge two separate Police Fire Pension funds to help reduce the City's $103 million unfunded liability. The merger of the funds is a recommendation from the Pension Review Committee created by City Councilman Trent Fellers and Mayor Chris Beutler in October 2015.
Firefighters and Police Officers are paid monthly retirement benefits in 12 checks from the base pension fund. A second pension fund was established in 1992 to provide a 13th check every September in lieu of a cost of living adjustment. Annual 13th check fund deposits vary based on the performance of the base pension. If the base pension earns a higher than expected rate of return, part of those funds are placed in the 13th check fund. The proposal would combine these two pension funds into one, and pension recipients would continue to receive a 13th check from the combined fund.
"Contribution amounts and budget demands will continue to increase unless elected officials and pension participants have the courage to not only acknowledge the problem, but follow through with necessary and long-term changes to the pension," Fellers said. "The changes are the first step in addressing the pension's unfunded liability and reducing the burden on the City budget and Lincoln's taxpayers."
The Mayor thanked Committee Chair Richard Evnen, the former CEO of Lincoln Poultry, and the other members for their work and said he would address other recommendations in their report. Committee members included Fellers; former City Finance Director Don Herz; Kyle Kollmorgen of Kollmorgen Associates; former City Councilman Dan Marvin; Gina Simpson of Ameritas; and Lincoln Zehr of Hampton Enterprises.
"I appreciate the hard work and great leadership Trent demonstrated on this challenging issue," Mayor Beutler said. "I am confident that this will help to improve the status of the pension fund, on which our retired police and fire personnel depend."