DIXON – The city isn’t seeing the level of investment returns it needs for its longterm pension funding plan, and so continues to discuss putting $3 million into fire pensions.
Rory Sohn, from the accounting firm Wipfli, recently presented audit findings to the City Council and said 4-year average investment returns for both the fire and police pension funds are falling short of goals to get annual returns of 6.5 percent and 6.75 percent, respectively.
Hitting those marks is important to reach the city’s 100 percent funding goal for 2040 – by state law, municipal pension systems need to be at least 90 percent funded by that time.
Fire pensions are 43 percent funded and the police pensions are 57 percent funded.
In the last 4 years, police pension investment returns averaged 3.7 percent and fire returns averaged 2.8 percent.
“You’re not making a lot of progress there,” Sohn said.
The city is more limited with fire pension investment options because the fund is sitting at about $8.3 million, and there’s more flexibility in funds totaling $10 million, which is why the council has talked about boosting it by about $3 million during the past few years in hopes of getting better returns.
The council also has been upping its annual pension contributions each year.
“I’m disappointed to see us going backwards despite putting more money into the pensions,” Mayor Li Arellano Jr. said.
The council hasn’t made a decision on whether to increase the fire pensions by $3 million or where the funds would come from, and is awaiting a plan of recommendations by City Manager Danny Langloss.
The City Council next meets at 5:30 p.m. Nov. 5 at City Hall, 121 W. Second St.
Go to discoverdixon.org or call City Hall at 815-288-1485 for an agenda or more information.