Letter: No quick fixes for pension plan
To the Editor:
Trumbull’s pension plans require common sense action. We will achieve a good result for everyone with sensible solutions. While we have reached Actuarially Recommended Contribution (ARC) levels for our town plan, we remain well below ARC requirements for our police plan. Funding ratios for both plans are low. I offer the following remedy.
We achieved ARC funding for the town plan by a deliberate approach begun under Mr. Halaby and continued by succeeding administrations. Using a football analogy, from a pension perspective, Mr. Halaby was on his own one-yard line. Recognizing he had time on the clock, rather than attempt a “Hail Mary” pass to fix the problem, he chose to steadily march down the field. His successors did the same. Steadily increasing contributions each year protected taxpayers from a huge tax increase while moving toward our goal. We should stay the course and, depending on how aggressive we are, we can reach ARC funding for the police plan in two to four years.
Mr. Herbst initiated a Charter Revision process that would MANDATE future First Selectmen meet ARC funding requirements annually. This approach raises questions. If meeting annual ARC requirements is so important, why didn’t Mr. Herbst do it? In all five of his budgets he NEVER met ARC funding for the Police and did it twice for the Town Plan. He had reasons but his actions beg the question, why should we mandate something for future First Selectman that Mr. Herbst himself failed to do? His actions suggest it is a bad idea to limit flexibility of future First Selectman. Even if we gave the Town Council authority to over ride this Charter mandate, this will inject unnecessary politics into pension funding.
Both plans need cash infusions to reach the 100% Funding Ratio goal. How can we do this? Begin with politicians keeping their promises. In 2009, candidate Herbst promised to put into the pension plans 25% of any surplus. During his tenure the town and the Board of Education had surplus funds. Did Mr. Herbst keep his promise? NO. Rather than mandate ARC funding, a better approach is that the Charter be revised to MANDATE that 30% of any surplus be put into the Town Pension Plan until it reaches 100% Funding Ratio.
The police plan, currently at a 77% funding ratio, has the opportunity in the next budget cycle (2014-2015) to receive a substantial one time contribution. The Police Special Agency Fund has a balance of approximately one million dollars. This money comes from fees paid the police for security services (for example), and that fund has grown steadily. We should put all this million dollars into the police plan. We should not use any or all of these funds for the dubious purpose of artificially lowering the tax rate as proposed by Mr. Herbst.
My suggestions are not quick fixes. There are none. Continuing a disciplined approach to ARC funding supplemented by cash infusions into the town and police plans is a sensible approach.