Ordinance to fully fund police and fire pensions kicks in for first time

Mar. 17----

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A 2017 ordinance passed to prioritize funding for Lincoln's pension plan for firefighters and police prompted the first Lincoln City Council action to ensure the city fulfilled that promise.

On a unanimous vote, council members Monday authorized the city to redirect $676,000 in contingency money into the pension fund so the city contributed 100% of the pension plan's actuarial value for the current two-year budget.

"This is the first year that we have to meet a certain amount of dollars," Lincoln Finance Director Brandon Kauffman said.

In the past, the city had room to deviate from that value when making budget decisions, but the May 2017 ordinance required the city to ensure it fully funded the plan and not just cover the annual operational and administrative costs.

At the time, two council members, Jon Camp and Cyndi Lamm, opposed the ordinance because they believed it would hamstring the city during tight economic times.

Monday's action followed a host of city budget adjustments, including $1 million in cuts, last August to ensure the city had a balanced budget after lagging tax revenue created a nearly $6.8 million shortfall.

Lincoln police officers and firefighters have a defined benefit plan that requires the city to pay specific monthly benefits at retirement based on wages. Other city employees have defined contribution plans, where the city and employees contribute to the plan but the investment results and retirement benefits are not guaranteed.

Proponents of the ordinance then argued the city either had to meet the funding levels in the near term or stick future councils and city administrations with the legal obligation to fully fund the pension plan with interest.

Councilmembers Jane Raybould and Roy Christiansen voted for the 2017 ordinance.

"We are obligated to do this to make sure the fund is where it is recommended to be by our actuaries," Raybould said.

No one opposed Monday's resolution.

Reach the writer at 402-473-2657 or [email protected].

On Twitter @LJSRileyJohnson.

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