ALBANY, Ga. — The city’s pension fund for retirees grew by 7.5 percent in the first half of the year, propped up partially by a strong bond market, a consultant told the pension board Thursday.
Growth in any kind of government-backed pension program has proven elusive throughout the country. The state of California, for instance, has seen it’s investments grow by only .03 percent this year, Warren Willis of Merrill Lynch said.
“This board has never been like some others and made a knee-jerk reaction, and it’s paid off quite well,” Willis said.
That doesn’t mean the program hasn’t made some critical changes; those changes have just come more deliberately and seem to be paying off, officials say.
Phil Roberson, the city’s Public Works director and the chairman of the city’s pension board, said the board’s decision in 2007 to require employee contributions helped keep the plan solvent without placing a larger burden on taxpayers.
The city’s current actual accrued liability for its pension fund is $158 million, which is down from $181 million last year.
Last year, the city paid $10.2 million to retirees, Roberson said.
“In the long run, I think that Albany’s pension is in a lot better position than some of our sister cities,” Roberson told the board. “We’ve avoided making any major asset shifts and haven’t had to make any major changes in our money managers.”
The city’s retirement plan requires a split employee contribution. In total, non-public safety employees make an 8.9 percent contribution to the pension plan annually, which includes a mandatory 4 percent employee contribution.
Public safety employees have an 11.9 percent total contribution, which includes a 7 percent contribution from employees.
Contributions last year from employees totaled $2.3 million. Another $4.5 million was contributed by the city. That money is collected and invested through Merrill Lynch by no less than six different money managers who further invest the funds in a variety of different areas to give the city a diverse portfolio to hedge against losses in any one sector.
Currently, the city has 1,165 active employees paying into the pension plan and 786 retirees drawing a check. Another 329 employees are vested but aren’t yet drawing any retirement, Roberson said.