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Written By: Jeff Ignatius
Category: Local News
State public-employee pension systems are grossly underfunded in general and are financial time bombs for most states. According to the 2010 paper “Are State Public Pensions Sustainable?”, 31 state pension systems will run out of money by 2030 at current benefit and funding levels. (Illinois topped the list, going broke in 2018; Iowa is in better shape than most states, with an estimated expiration date of 2035.)
What’s happening in cities across Iowa with police and firefighter pensions, though, shows the flip side – the short-term budget pain that accompanies a well-funded system when investments perform poorly.
In Davenport, the cost of police and firefighter pensions will increase from roughly $3.3 million in Fiscal Year 2010 to $5.5 million next fiscal year and an estimated $6.6 million in Fiscal Year 2014, according to city Budget Director Alan Guard. Over the four-year period ending in 2014, Guard said, the cumulative additional cost is $7.75 million.
In Bettendorf, the cost of police and fire pensions increased from roughly $747,000 in Fiscal Year 2010 to $1.22 million next fiscal year and an expected $1.36 million in Fiscal Year 2014, according to City Administrator Decker Ploehn. Over the four-year period ending in 2014, the cumulative additional cost is $1.62 million.
Read More About How Public-Safety Pensions Are Increasing Your Taxes...
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