City Considers Changes in Pension Plans

Monday night’s city council work session featured an in depth discussion of City of Falls Church pension plans for current and future employees.

The City of Falls Church Retirement Board presented an in depth actuarial valuation of the City’s two pension plans, the police plan and the basic plan offered to all city employees.

Connie Rydberg, chair of the Retirement Board, presented a much brighter outlook regarding pension plans than she did last year, when there was a major shortfall in the funded status of pension plans.

As of July 1, the city was able to fund 94 percent of pensions versus just 76 percent at the same date last year.  Economic gains for the city during the past fiscal year greatly reduced future pension contributions from the city.

A lot of assumptions and estimates go into the yearly projected contributions, the financing costs of which are currently still driven by bad investment losses in 2008 and 2009. Lower pay increases and a higher return on assets in 2011 are also major factors affecting pension plans for city employees.

The Retirement Board recommended that the city lower its’ contribution amount for pension plans based on the actuarial valuation assessed by the city’s actuary earlier this year.

The council took no action on the issue but Mayor Nader Baroukh did propose a February time frame for when they should consider changing the city pension plans based upon the Retirement Board’s presentation.