18 - Firefighters Relief & Retirement Fund -Pursue a Pension Bond - Freeze Fire Pension - Transfer Employees to TMRS

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and therefore accepting that in 30+ years from now, employees will be only making approximately $34k in retirement, which is unlikely to keep pace with the rising cost of living. 4. This will deter young men and women from considering a career as a Paris Firefighter, let alone promoting as there are no retirement incentives to either. 5. The growing unfunded liability will become more challenging for our future taxpayers to take on and address, particularly if an increase in benefits is ever approved, which could one day lead to the city's having to make difficult decisions. 6. If the legislature ever passes legislation like that referred to above, the city could be forced in a direction it is not ready to move in a very short period of time. 7. To ask the fire employees and taxpayers to increase their annual contribution beyond the 16%/14% will continue to become a challenging request, particularly given this only seems to be a costly and perpetual band aid for the situation. 8. And finally, even if annual contributions are increased, the annual benefit is not increased, and the city deposits a large sum of money, what ground has been gained? Eventually the retirement benefit will become undesirable by employees and/or we will need to issue more long term debt to keep the fund afloat for an indefinite period of time. This seems to be the inevitable future for many small scale pension funds. After considering all of this, we concluded that something needs to change. You don't just keep throwing wood into a fire: eventually you need to take the necessary steps to put the fire out. STATUS OF ISSUE: Having learned all of this, we set out to explore an option of moving the Paris Fire Fighters from the Pension over to the city's TMRS. TMRS is a well-established, well run, and well -funded program. The contribution rate is 7% Employee / 14% city matching contributions (it was 6%/12% until it was changed for FY21/22). In reality, the city's required contribution is actuarially determined each year and generally has averaged below 8%. All in all, it is a much more cost friendly program for the employee and the taxpayer. In addition, assuming the same factors at play for pay and years of service, the benefit is believed to be much more advantageous to the employee than the current Pension. With this in mind, we reached out to TMRS and the Pension actuary to explore the options. While a blending or merger of the assets in the Pension with TMRS is not possible, we are working out a plan where the city would "freeze" the Pension and move all existing and future employees over to TMRS accounts. For existing employees under the Pension, you would be vested for your years of service to date, but it would be frozen as of the date the transition takes place, with all future years counting towards TMRS. The employee and city's annual contribution rate would drop from 16%/14% to 7%/14% respectively (again, the city's actual contribution would be closer to 8%). Doing this, however, would require the city to take out a large bond to fund the unfunded liability