DeKalb’s Pension Cost Acceleration

Published

[easychart type=”horizbar” width=”420″ title=”Police and Fire Pension Costs in Millions of Dollars” groupnames=”Annual Pension Costs” valuenames=”FY2004, FY2005, FY2006, FY2007, FY2008, FY2009, FY2010, FY2011″ group1values=”1.55, 1.72, 1.8, 1.98, 2.23, 2.38, 2.86, 3.36″ minaxis=”1.5″]

Annual pension costs (APCs) are what the city contributes to the pension funds each year.

APCs were increasing about 10% annually earlier this century, but now they are jumping 20% a year. Or to put it another way, we’re now adding to the police and fire pension funds at a rate of $1 million every two years.

The reasons for this acceleration are that 1) we’ve added 17 retirees during this period, 2) newer retirees are more expensive than the old, 3) retirees get pension raises every year, and 4) retirees don’t die like they used to.

I’m not posting the IMRF APCs because they’re not as scary — yet. Those APC increases have averaged about $90,000 per year for the same period as police/fire and stand at a mere $1.2 million.

However, a comparison of the numbers of police/fire retirees with the OPEB beneficiaries suggests five IMRF people might have retired last year; if so there will be an effect seen in FY2012. Also, looking at the Voluntary Separation list (after removing the names of those I know or think have already left city employment) I estimate as many as three dozen IMRF workers remain who are 50 years of age or older and about a third of that number are 55-plus.

Altogether the APCs now account for 15% of General Fund expenditures and it is reasonable to believe they will continue to gobble up ever larger chunks of our operating budgets. I believe we should be talking about this.

Sources: Annual budgets and Comprehensive Annual Financial Reports (CAFRs) from the City of DeKalb Downloads page.