City Auditor: Richmond’s pension system is in jeopardy
RICHMOND, Va. (WTVR)— After 41 years on the force retired Richmond police Sergeant David Childress says he’s barely making ends meet.
“I got to the point…because of the economic conditions we’re in now. I had to go back to work.”
“My wife doesn’t work. She’s had a number of health issues. So, I had to take care of her. Our youngest son, he’s got some health issues unable to work. So, I have to support him. My grand-daughter now lives with us,” said Childress.
“I’ve got 4 people to support on what little income I have,” said Childress.
Childress said he’s living on $1900 a month after taxes and healthcare expenses.
He said he certainly didn’t anticipate this.
“I thought after retirement I’d be able to enjoy things,” said Childress.
Childress like other Richmond police, and fire and public safety employees are under the city’s defined benefits retirement plan.
A pension fund that could be jeopardy based on the City Auditor’s latest report.
According to the report, in 1993, 153 active members were contributing to Richmond retirement system for every 100 retirees drawing pension from the system.
In 2012, there were only 57 active members for every 100 retirees.
The Auditor’s findings also shows the amount of money the city is expected to pay out in pensions increased from $0 in 2000 to $370 million in 2012.
Umesh Dalal says he’s expecting that amount to get higher and adversely impact cash flow of RRS, thereby requiring additional contribution from the City.
When the economy hit rock bottom, the investment return on that money decreased from 15.2% in 1992 to 2000. And 3.1% from 2000 to 2012.
“It’s all depending on the stock market. It’s all depending on how much the city puts into it,” City Council President Kathy Graziano.
According to City Council President Kathy Graziano, they approved roughly $ 3million for this budget cycle.
But the City Auditor says it will take $5.5 million to keep the system fully funded by 2027.
“We need to look at this budget and put our priorities in place. this may be a priority it may not,” said Graziano. “I don’t think anybody can see into the future. Every locality is facing this same dilemma.”
“That does give me a lot of concern,” said Childress.
But Childress is hoping the City of Richmond can sustain the retirement system. So, he can get that needed money. But in the meantime, he says, “I’ll keep working and look for another job too. Might have to work three.”
Graziano tells CBS 6, that major city projects like the Redskins Training camp and the International Cycling Championship will help boost the local economy. So, those dollars can go back into the City’s Retirement system.
And Richmond Retirement System Chair, Ronald Tillett released this statement to CBS 6″
“The staff of the Richmond Retirement System had the opportunity to meet with the City Auditor prior to the issuance of his report regarding the Sustainability of the Richmond Retirement System. The staff reviewed the information and the findings in the report and made a number of suggestions. In addition, the staff of the Retirement System provided information to the Mayor’s Commission on Pension Liability Assessment established in March 2011. In addition to other items, the Mayor charged the Commission to: “Advise the Mayor and Council on the long term nature of the pension liabilities that the Richmond Retirement System places on the City with an acute eye toward ensuring that the pension obligations to our employees and retirees is being met.” The report addressed this issue and many others more than a year ago.
The Commission on Pension Liability Assessment and the City Auditor came to some of the same basic conclusion as a result of their assessments: the operations and management of the Richmond Retirement is strong and effective as evidenced by numerous pension association and government awards, the Retirement System has continued to achieve excellence in financial reporting, funding, and administration awards from the Governmental Accounting Standards Board, and finally, and most importantly, additional resources will be required to improve the funded status of the system.”
Ronald L. Tillett
Richmond Retirement System