STEPHEN E KRAFT

Council member Ward 1

KraftStephenE@gmail.com
314-863-1136
KRAFT  U CITY COUNCIL
link to full legal document

FACING THE CHALLENGES OF UNDERFUNDED PENSIONS
We must make sure that the U City pensions systems remain financially sound in
order to avoid massive financial liabilities and increased taxes in future years.

The U City Pension Boards are made up of committed people with a wide range of
skills who have done an excellent job guiding the plan through a difficult economic
period.  

However, even with excellent market returns over the last 7 years and increasing City
contributions,
the City’s pension plans are funded at just above the State
minimum requirement of 80%
.    

In dollars, the City’s pension plans (non-uniform, uniform police-fire)
are
underfunded by $11.3 million
(in a City with an annual budget of about $26
million).  Details below.

We need to reconsider how the City’s pension plans are constructed and funded.
Pension data can be opaque.  
The data below (taken from Buck Consultants, the Pension Plan actuaries) is an attempt to present the data
in an easy to understand fashion.

In 2014,
U City payed non-uniformed employees about $5.8 million in salaries.
The plan payed about $1 million to retired beneficiaries of that plan.

The actuaries estimated  liabilities of the plan at about $20.4 million.  (
current
and future
benefits that will need to be paid out, calculated in current dollars)

Current assets of the plan (stocks and bonds) are valued at about $16 million.

This leaves the non-uniform system underfunded by about $4.28 million  in
2014

The uniformed police-fire plan data is below and follows the same format

NOTE:
the non-uniformed pension is funded through general revenue
the uniform police-fire fund is funded through a dedicated property tax

The Library pays separately for the library employees, but the library pensions are managed
within the non-uniformed plan