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jacksonville Mayor donna deegan On Friday, she confirmed she was moving forward with the proposal. Borrow from pension fund assets for necessary renovations jaguars stadium.
The city’s proposal to keep at least some of its funding from internal sources is viable, giving the pension fund a higher return on investment than bonds as Jacksonville pays down its debt, according to a pension fund study. There is a possibility that it is.
First, the latest draft copy Police and Fire Pension Fund The October 2022 actuarial valuation report (which helps determine employer contributions for the current financial year) suggests that the fund’s investments are underperforming.
“The (net actuarial) investment experience resulted in an experience loss (net of reserves) of approximately $37.5 million. The smoothed actuarial investment return The rate of return was 4.80% compared to 6.625%. (As reported by the plan’s investment consultant, the net money-weighted investment return on the market value of the assets was -16.78%.) Investment gains and losses were calculated over a five-year smoothing period. The profit or loss from the previous year is calculated as follows: Smoothed to the current year.”
Simply put, the plan’s performance is roughly similar to that found in today’s high-yield savings accounts, and an investment in stadiums could be guaranteed a higher rate of return than what the fund is currently seeing. be.
Another factor the administration could use to argue its stadium funding plan is that the Police and Fire Pension Fund is actually not as well funded as it was in previous years, and that standards historically considered the best This is far below the average of 80%. Practice.
“This year’s funding rate was 45.97%, compared to 48.06% last year,” the report said.
Although some of this decline is due to changes in accounting methods, there is still room for improvement. And part of that improvement could be tied to a more stable funding scheme than recent investments from PFPF.
the city’s chief negotiator; mike weinsteinThe 1/2 cent sales tax currently allocated to the Better Jacksonville Plan’s obligations is due to agreements made over the past 10 years to eliminate defined benefit pension plans in exchange for defined contributions. In agreement, it pointed out that it is expected to be converted into a pension liability in early 2027. Planning and sales tax expansion. But police and fire pension funds are concerned that the sales tax may not be the silver bullet needed to deal with the debt.
The report states that “annual contributions to the Fund for fiscal years 2018 to 2030” are “if the Fund has sufficient assets to make all benefit payments (in the absence of a pension liability surcharge).” “This is significantly lower than the recommended contribution level to ensure reliable accumulation.” ”
Additionally, the PFPF document notes that liabilities exceed assets and that “the Fund’s assets are insufficient to cover the actuarial liabilities of inactive members.” As of October 1, 2022, the market value of our assets, excluding reserves, was approximately $1.97 billion and our actuarial liability for currently inactive members was approximately $3.74 billion. ”
The question regarding the sale of this plan is: Will leveraging the assets to finance the construction of the stadium ensure better returns and more solvency for both the Police and Fire Pension Fund and the General Employees’ Pension Fund?
This is a case the administration must make clear to stakeholders, and Mr. Weinstein rehearsed one of his strongest talking points, saying the funding system would help with the “premature closure” of pension funds.
Current expectations are that financial obligations for the 2016 completed program for new entrants will be fulfilled in 2061, and meeting that deadline will be beneficial to the city’s bottom line.
The math may be on them, but if they’re serious about moving forward with this, they’ll need to start coming up with a manufacturing consensus soon.
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