HomeMy WebLinkAbout10. 21-590DECEMBER 14, 2021 21-590 RESOLUTION
(CARRIED___7-0___ LOST_______ LAID OVER_______ WITHDRAWN_______)
PURPOSE: CLOSE FIRE PENSION FUND AND REDUCE POLICE PENSION
FUND / TRANSFER ASSETS TO THE WORKERS COMPENSATION
FUND
INITIATED BY: FINANCE DEPARTMENT
WHEREAS, the City of Oshkosh began participation in the State of Wisconsin
Retirement System in 1945; and
WHEREAS, beginning April 1, 1978 all pension payments have been made by the
Wisconsin Retirement Fund with the costs for all pensioners whose pension began before
January 1, 1973, or their surviving spouse, billed back to the City of Oshkosh; and
WHEREAS, since December 31, 2019 there are no more pensioners or surviving
spouses drawing on the Fire Pension Fund; and
WHEREAS, it is therefore appropriate to close the Fire Pension Fund and
consolidate and move the remaining assets into an existing active fund(s) which are
similar in nature to the inactive Fire Pension Fund; and
WHERAS, as of December 1, 2021 there is only one surviving spouse drawing on
the Police Pension Fund; and
WHEREAS, the current balance in the Police Pension Fund is substantially higher
than necessary to meet the remaining obligations of this fund and it is therefore
appropriate to reduce those funds and consolidate and move the remaining assets into
an existing active fund(s) which are similar in nature to the Police Pension Fund; and
WHEREAS, the Finance Department has studied the City’s current funds and
determined that the excess funds may be most beneficially transferred to and used in the
Workers Compensation Fund and that the Workers Compensation Fund will provide
benefit to the employees of the City of Oshkosh and is therefore similar in nature to the
pension funds.
DECEMBER 14, 2021 21-590 RESOLUTION
CONT’D
NOW, THEREFORE BE IT RESOLVED by the Common Council for the City of
Oshkosh that the Fire Pension Fund be closed and the remaining assets be transferred to the
Workers Compensation Fund.
BE IT FURTHER RESOLVED that the Council hereby determines that the Police
Pension Fund contains surplus funding and that the appropriate city officials are hereby
authorized and directed to transfer $500,000 from the Police Pension Fund to the Workers
Compensation Fund.
Finance Department
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.ci.oshkosh.wi.us
TO: Honorable Mayor and Members of the Common Council
FROM: Russ Van Gompel, Finance Director
DATE: December 7, 2021
RE: Approve Closing Fire Pension Fund and Reducing the Funding of the Police
Pension Fund
BACKGROUND
The City of Oshkosh began participating in the Wisconsin Retirement System in 1945.
Prior to that, the City maintained a separate Police Pension Fund and Fire Pension Funds.
In 1978 the Wisconsin Retirement System took over payments of former employees and
surviving spouses and would charge back to the City the cost of those payments.
The City used the remaining funds in the Police and Fire Pension Funds to account for
the charges of employees or their spouses who retired before 1973. The last payment
made for these individuals in the Fire Department was made in 2019. There has been no
charges in 2020 or 2021. As of December 31, 2020 the Fire Pension Fund had a balance of
$147,056.
The City has one remaining surviving spouse being charged back to the Police Pension
Fund. She is 93 years old. In 2020 and 2021, the fund is paying $5,200 annually for the
surviving member. The Police Pension Fund had a balance of $584,370. If $500,000 was
transferred out of this fund. The Fund could still be sufficient to make over 16 years of
payments to that one surviving member. The fund would continue to grow based on
interest earning accumulated during the next 16 years or so. If the surviving member
continues past the 16 years, the $5,200 annually would have to be absorbed by the General
Fund.
ANALYSIS
With the closure of the Fire Pension Fund, approximately $147,056 will be transferred to
the Worker Compensation Fund. The transfer of $500,000 from the Police Pension Fund
will also be moved to the Workers Compensation Fund.
The Workers Compensation Fund has a negative fund balance as of December 31, 2020
of $465,901. I am projecting that the Workers Compensation Fund will end 2021 with a
Finance Department
City Hall, 215 Church Avenue P.O. Box 1130 Oshkosh, WI 54903-1130 920.236.5005 http://www.ci.oshkosh.wi.us
negative fund balance of over $900,000 due to claims exceeding our charges to the various
departments. The transfers in from the Fire Pension and Police Pension fund will help
with closing the gap. I am working on a plan to get the Workers Compensation Fund
back to a positive fund balance and hopefully provide some additional reserves. I am
presenting a plan to finance the remaining shortfall in the Workers Compensation Fund
under a separate item on this City Council agenda.
The closure of the Fire Pension Fund and the transfer from the Police Pension Fund was
reviewed by the City Attorney and an attorney with the Law Firm, Buelow, Vetter
Buikema, Olson & Vetter, LLC.
FISCAL IMPACT
The transfers of funds from the Fire Pension Fund and Police Pension Fund will help
restore some of the fund balance needed in the Workers Compensation Fund.
The only other fiscal impact will occur if the surviving member of the Police Pension
Fund, who is 93, exceeds 16 years. After 16 years, or more depending on investment
earnings, the $5,200 annual expense will have to be included in the General Fund.
RECOMMENDATION
Staff recommends that Council adopt this resolution.
Respectfully Submitted, Approved:
Russ Van Gompel Mark A. Rohloff
Finance Director City Manager