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Cincinnati Council gets retirement system update Monday

Jay Hanselman
/
WVXU

Update 6/5/2013 at 10:20 am:  Documents received from the city show the pension system's unfunded actuarial accrued liability as of 12/31/2012 was $862,122,656.  That compares with the unfunded actuarial accrued liability as of 12/31/2011 of $728,428,380.  That means the unfunded balance increased by more than $133 million during that time.

One section of the report states:

"The system had significant actuarial losses for the year. Most of this loss came from the loss on the actuarial value of assets for the year. Although the system had a positive investment return for 2012 of 12.06%, the system still had a loss of $110 million due to the continued recognition of asset gains and losses for the past five years. This is mainly due to the 2008 economic downtown and the loss generated from the 2011 fiscal year which saw the market value of assets return only 0.88%."

Cincinnati Council's Budget and Finance Committee will get an update Monday on the city's troubled retirement system.

Financial managers and city staff will provide information on the plans value at the end of 2012.  They gave a similar draft report to the city's retirement board on May 2nd.  

A copy of that PowerPoint shows as of December 31, 2012, the plan was 63 percent funded based on market value.  That means for every dollar of liability, the plan only has 63 cents to pay out.  

Another actuarial value places the system at 61 percent funded.  

The report also showed the plan's investments return was 12 percent for 2012.  That's better than the 7.5 percent manager's had planned.  

The officials said the city's required contribution to the retirement system for fiscal year 2014 should be about 49 percent of the city's payroll.  For comparison, the budget Council approved last week had a contribution of 20 to 22 percent of payroll.  

The city's retirement board and Council have been making changes to the pension system to reduce the amount of its unfunded liability.  

At the end of 2011, that number totaled $680 million.  

 

Jay Hanselman brings more than 10 years experience as a news anchor and reporter to 91.7 WVXU. He came to WVXU from WNKU, where he hosted the local broadcast of All Things Considered. Hanselman has been recognized for his reporting by the Kentucky AP Broadcasters Association, the Ohio Society of Professional Journalists, and the Ohio AP Broadcasters.