Retirement Fund Jeopardized
Not a few municipalities are having retirement, and pension fund troubles these days. Chief trouble is one of finances. Not a few cities are faced with the need of either digging up more money for funds, or paying out less.
A survey of the Charlotte, N. C., Firemen’s Retirement fund, for example, shows that its liabilities are more than assets by $2,612,604 and that its deficit is increasing at the rate of $50,000 a year, indicating that sweeping changes are needed to prevent bankruptcy.
The problem which has been brought to the attention of the City Manager, Guy Nagwell, chairman of the Retirement Fund Board, will receive study by the board of trustees, the Charlotte City Council and the State Legislature of North Carolina.
The report shows that within seven years the fund will be paying out each year more than it takes in. “This” the report states, “will be the beginning of the end.”
Under this retirement plan a fireman may retire at one-half his average monthly pay of his last three years of service when he (1) becomes disabled; (2) completes 25 years service or (3) becomes 65 years old.
The plan, in operation five years, to be sound financially should receive regular contribution of 17 per cent of salaries. The plan now has a rate of 10 per cent contribution of firemen’s salaries, 5 per cent by firemen themselves, and 5 per cent from the city. This contribution has been in effect from the beginning of the plan but there was no appropriation for the previous service of those already in the department.
The survey firm recommends that the normal average retirement age be set at 60 years, with minimum of 30 years’ service; continuation of the firemen’s contribution of 5 per cent of monthly salary but increase in the city’s contribution from 5 per cent to 12 1/2 per cent, and that retirement allowance to firemen upon retirement be 50 per cent of average salary for the past three years of service.