The Lexington-Fayette Urban County Government faces a growing retiree benefit funding problem for its Policemen’s and Firefighters’ Retirement Fund.
Today, a Task Force met with a consulting firm to find a plan to solve the retirement fund’s problems.
Lexington Mayor Jim Gray said this is not an easy task because you want to give dignified retirements to the safety officials, but also be aware that the funding comes from the taxpayers.
Gray added that many factors have gotten us into this position.
According to the Public Financial Management’s report, here are just some of the reasons the pension fund is short:
- Members and beneficiaries are living longer.
- Investment Losses
- Historical underfunding of the plan
- Plan benefit changes that were insufficiently funded
- Wage increases grated beyond actuarial growth assumptions
- Automatic cost of living adjustments are granted despite the plan’s underfunded status
The Task Force will meet again on December 20th to discuss possible plans to fix this problem.
Public Financial Management said this will need to be a shared solution between the city, taxpayers, current employees, retirees, and future hires.