Chambana Sun

Danville’s police and fire pension funds weathered the downturn in the stock market relatively well, the fund manager told the City Council at a recent meeting.

“The asset returns, we had a bad year, right, we had a negative 6.5%,” Bob Rietz, a representative of Lauterbach and Amen, said in the meeting. “But the contribution didn’t get changed by very much. And again that’s that actuarial value of assets smoothing method with the gains offsetting losses helped us there. That was able to protect us from a real big spike in contribution.” 

As the actuary for the pension funds, Rietz explained that the recommended contribution for the fire pension fund this year was $4.93 million, a $100,000 decrease from last year. The recommendation for the police pension fund was $4.57 million, up $26,000 from the previous year. 

The fire pension funds are now funded 23.05% and police funds are up to 32.2%. Together they had a gross increase of 2.8% over the last year. This was likely because of the city changing the methodology of how it funds the pensions. The goal is to be able to have them fully funded in less than 20 years. Rietz noted that if the City is able to increase the amount funded by 3% or 4% each year, Danville should be able to achieve that goal. 

The median funding level for municipal pension funds is between 50% and 60%. While the City is under that level, Danville’s recent change in funding structure should alleviate some of their shortfall in the coming years. The City has also begun a system that spreads out its gain or loss each year over five years instead of one, so that it sees a smoother and more constant change and not harsh dips or peaks each year.