Public Employees Feel Safe with City Pension

City of Tallahassee employees can rest a little easier knowing Tallahassee has received an A rating on its pension plan in a recent study by the LeRoy Collins Institute (LCI).

The LCI conducted research on pension plans for Florida’s 100 largest cities including Panama City, Miami and Gainesville. According to the LCI report, the purpose of the study conducted was to increase the transparency of the different cities’ pension plans to increase public awareness.

Tallahassee was ranked among the top 14 percent for its pension program and was one of only nine total plans that were funded at 100 percent or over. Tallahassee’s pension program is funded at 108.31 percent. Other cities that are funded at 100 percent or over are Gainesville at 131.67 percent and Melbourne funded at 190.10 percent.

“What employees want to know is that they are being treated fairly and there are funds available to pay for your benefits after you retire,” said Michelle Bono, assistant to the city manager. “Getting the A rating means that when I retire, that there will be funds able to pay.”

For a city to receive the F rating, the pension plan must be funded at less than 60 percent. This list includes Panama City, funded at 58.53 percent, and Miami, funded at zero percent.

“Hollywood, Jacksonville, Cape Coral and Miami, for example, have recently grappled with budget shortfalls and targeted local pension reforms to help alleviate the problem,” reads the report dated November 2011. “Other cities have avoided newspaper headlines, but are also facing serious problems trying to balance their budgets, fulfill promises to employees, and maintain services to their citizens at the same time.”

“It is also important to tax payers,” said Bono. “In a lot of cities in that report, they don’t have the funds necessary to cover its costs.”

The establishment of Tallahassee as an A rated pension plan was not only for being fully funded. Another aspect examined was the cost of the pension plan on the employees depending on it. The LCI also determined the amount employees pay per year on average into their pension plan.

Cities that received an A rating have a median cost per participant of $5,784. Employees of F rated cities pay an average of $26,305 a year into their pension plans. This means, the City of Tallahassee has the appropriate funds set aside to cover financial liabilities for its employees at a low cost to them.

“I think it is a good deal for tax payers and I think it is a good deal for city employees because it is kind of like what people are saying about Social Security and it not being there after we retire,” said Bono. “This is a statement that it will be there.”

Attempts to contact Commissioner Andrew Gillum were unsuccessful.