Joplin City council members met Monday night and have decided to move forward with recommendations to improve Police and Fire retention, recruiting and retirement benefits.
The city says that Joplin is facing recruiting and retention issues in public safety. The city did implement several measures to help promote recruiting and retention but the general consensus is that more needs to be done to address the issue. A workgroup consisting of several city leaders and public safety leaders was formed to work on the problem.
They began to focus on the current public safety retirement plan in relation to recruiting and retention. They discussed the pension plan history and financial data, the city’s downgrade in credit rating by S&P that noted the “poor pension plan”, info from other cities that have made changes to their plans, and other options for recommendations from citizens and others.
The pension plan is currently 63.7% funded, amortized over an 18-year closed period. The city says in order to reach 100% funded, the plan should be gaining 2% funded each year. The city has been contributing actuarial recommended rate but the plan is still underfunded by nearly $24.1 million. The unfunded liability also continues to increase rather than decrease.
The city claims that other cities around Missouri face similar issues, including Kansas City and Springfield. Many agencies enhanced public safety pension benefits during the 1980’s and 90’s when plans were relatively well-funded. But they say in the 2000’s these types of self-funded plans began facing funding shortages as liabilities increased, funded ratios decreased and city contributions increased significantly.
The workgroup recommends to close current pension plans to new hires, migrate new hires to LAGERS L-11 plan and offer “Tier II” employees voluntary option to remain on the existing plan.
They also recommend asking voters on November 5th to approve a half-cent general sales tax dedicated for a special, temporary funding source for a set time that’s yet to be determined.
The city says they will improve employee recruiting by offering a competitive retirement plan requiring no employee contributions and including a vesting component. It will also ensure funding of closed pension plan for retirees and current public safety employees on the plan. It would even have an immediate take-home pay increase of 10% through contribution reduction for “Tier II” employees who migrate to LAGERS.
The council says their next steps are seek approval from the pension board this week, to update council as the plan progresses, establish a timeline with required steps, engage the citizen committee to begin public education for voters and take formal action at a future meeting.