Greensburg pension fund needs strong finish to hit goal in 2014
The City of Greensburg’s police pension fund survived a volatile October and is up 5.82 percent over last year.
But it still has some way to go to hit its 8 percent target.
Jeffrey Davidek, vice president of CS McKee Investment Managers in Pittsburgh, gave representatives from council and the police department an update on the fund, which was at $17.7 million at the end of October.
“Compared to other municipal plans, the city plan is actually well-funded,” he said.
Shaky European markets, the Ebola scare and shifting federal policies hammered the stock market in October, which caused the pension plan to dip for a bit, Davidek said. However, the market has recovered, he said.
The city is hoping its investments will grow the fund by 8 percent by the end of the year. If that target is not met, the city will have to pay more to cover the costs.
Greensburg is facing rapidly rising pension costs because of longer life expectancies and a spate of officers retiring at a young age, according to city manager Sue Trout.
The police department’s pension costs are expected to hit $1.2 million in 2015.
The city will be responsible for about $832,880. The state is expected to chip in $375,000, and about $128,000 will come from police officers’ contributions.
Despite the city’s financial difficulty, its pension fund is performing better than many others nationwide, according to Davidek.
Across Pennsylvania, 573 municipalities, including Greensburg, are labeled as “distressed” by the state Public Employee Retirement Commission. That is almost half of all communities statewide.
It’s too early to tell whether Greensburg will hit its target, but “we are still on track for a positive year,” Davidek told council.
Until recently, Greensburg officers could retire with full benefits after 20 years on the force. The city changed the contract in January 2009 so that officers hired after that date will not receive full benefits until they meet certain requirements.
Jacob Tierney is a staff writer for Trib Total Media. He can be reached at 724-836-6646 or firstname.lastname@example.org.