WEST DES MOINES — The amount Iowa cities pay for police officer and firefighter pensions will grow slightly for the first time in four years.

The Municipal Fire and Police Retirement System of Iowa announced Friday that starting July 1, municipalities will contribute an amount equal to 26.02 percent of their public safety officers’ salaries to the retirement fund.

That small increase from the current 25.68 percent rate marks the first time since 2014 employer contribution rates have increased. The percentage had steadily declined since peaking at 30.21 percent in 2014.

Police and firefighters will continue paying 9.4 percent of their earnable compensation into the pension and disability system.

While the MFPRSI board of trustees said the investment income for the pension system exceeded expectations, the increased city contribution rate was based on retirees projected to live longer.

“This year, our return gains were offset by the board’s decision to adopt an updated mortality improvement table,” Terry Slattery, executive director of MFPRSI, said in a news release. “We’re taking a proactive approach to keep the system sound and secure for many years to come by adjusting for increased lifetime longevity of the system’s retirees.”

Marty Pottebaum, MFPRSI board chairman, said the change was made after careful consideration.

“The board is mindful of our dual role in minimizing the impact rates have on our municipalities and the taxpayers we serve, while also providing a secure retirement for Iowa’s police officers and firefighters,” Pottebaum said.

While a majority of public employees in Iowa are covered under the Iowa Public Employees Retirement System, or IPERS, municipal police and firefighters in larger communities pay into and receive retirement benefits through the separate “411” program, named after the code section governing it.

Cities have complained in the past about the state of Iowa’s decision in 2012 to stop contributing to the program. The state was paying nearly 4 percent of the costs when the MFPRSI was started in 1992.

Unlike IPERS, which currently has a 5.95 percent employee and 8.93 percent employer contribution rate, most MFPRSI participants don’t pay or receive Social Security benefits, relying entirely on the pension fund for retirement and disability income.

The city of Waterloo’s current budget includes $4.3 million in MFPRSI contributions. The new rate would add about $60,000 in new costs assuming the same police and fire payroll. But the cost to the city likely will be higher as those workers are expected to receive pay increases next year.

Angry
0
Sad
0
Funny
0
Wow
0
Love
0

Staff Writer

Waterloo city reporter for the Courier

Load comments