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Palm Bay Revises Pension Fund

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  • Palm Bay Revises Pension Fund

    Florida Today

    Palm Bay to tweak pension fund

    City to issue bonds to lower payments

    By Victor Thompson
    FLORIDA TODAY

    PALM BAY -- If all goes as planned, Palm Bay's 30 retired and disabled police officers and firefighters, as well as hundreds of the departments' current employees, will have a stronger pension fund by the end of the year.

    A resolution up for consideration by the City Council on Thursday night authorizes City Manager Lee Feldman to create a program only three other cities in the state have in place to manage their pension funds. The program allows the city to issue bonds that would reduce its interest payment into the police and firefighters' pensions. It also will protect $3.8 million in pension fund money that can be vulnerable to market slumps and increased payouts to retirees.

    Feldman said Tuesday the measure would save the city more than $900,000 by reducing its interest rate payment from the current 8.5 percent to 6.5 percent under the program.

    "The city has a responsibility to make sure that there is going to be enough money in the pension fund to make it financially sound," Feldman said.

    At the current rate, he said the city is not making a similar return on its investment because the market is paying slightly less into the pension fund than the rate the city pays to protect it. With the bond program, known as a Pension Obligation Loan Pool Bond, the city pays the lower percentage rate.

    Retired Palm Bay police Lt. Richard Adams, who is a member of the five-member board of trustees for the Police and Firefighters' Pension Plan, said the board has little say about the choice, but he will discuss the plan at the board's quarterly meeting today.

    "All the board can do is review it and prepare the members for it. It's not going to affect the pension board negatively," Adams said.

    The program also would allow Palm Bay to invite other cities across the state to share the cost of issuing pension bonds, bringing in $30,000 to $70,000 a year from participating cities as well as an undetermined one-time payment for issuing the bonds.

    "We think if we can pool our resources together, we can create revenue for the city," Feldman said, referring to participating cities.

    So far no cities have signed up to join, but Feldman said the city would market the pension bond with St. Petersburg-based underwriter William R. Hough and Co., who was contracted to help create the program. Miami Beach, Gainesville and North Miami -- where Feldman created a similar program -- use this method to cover their pensions.
    09-11 .. 343 "All Gave Some..Some Gave ALL" God Bless..R.I.P.
    ------------------------------
    IACOJ Minister of Southern Comfort
    "Purple Hydrant" Recipient (3 Times)
    BMI Investigator
    ------------------------------
    The comments, opinions, and positions expressed here are mine. They are expressed respectfully, in the spirit of safety and progress. They do not reflect the opinions or positions of my employer or my department.

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