Pension Futures: Funding levels fall

March 22nd, 2014

Actuaries are projecting drops in the funded levels of Detroit’s two pension plans, declines they say are due, in part, to the city not contributing millions of owed dollars last year, The Detroit News reports.

During a presentation this week, the actuaries for the Detroit Police and Fire Retirement System said the fund’s 96 percent funding level is expected to fall to 89 percent as of June 30, 2013. Meanwhile, the General Retirement System expects its funded level to be 70 percent for last year, a drop from the 78 percent the fund previously had, the News reports.

The preliminary draft (for the Police and Fire Retirement System), which reflects the funding decline, factors in $71 million in unpaid contributions from the city in 2013. The fund is also operating under the assumption that Detroit will not pay another $63 million it owes by the close of the current fiscal year on June 30.

Spokeswoman Tina Bassett told the newspaper that “the GRS is owed $36 million in payments from the city from last year. It is expected to be owed $80.6 million for 2014,” the News writes.

The city has said it stopped paying into the funds because it could no longer afford to do so.