Re(5): Mike Deeson from Tampa 10 IP: 97.106.49.22 Posted on March 13, 2010 at 05:35:05 PM by david keene
That's right Jerry. the Base is replenished over time with contributions from the fire and police officers and the city and ALL return on investment of the total fund until all losses or negative return is made up PLUS 5% growth for every year. It is not a "lump sum."
The Base fund must grow by 5% of the total fund every year to remain actuarially sound. During this makeup period, while the market recovers, the COLA account gets nothing. That's why assigning all loses to the COLA account is stupid. It also violates the contract big time. I don't care what any actuary says it;s wrong.
Market return from the COLA and the Base together allowed us to reduce contributions from the city and the employees dramatically. We did this in 1984.
If the COLA is reduced dramatically or absent, contributions will increase dramatically because growth assumptions on the Base account will have to be adjusted downward. This short term fix that has been suggested would have long term consequences that would hurt retirees, actives and Taxpayers.
I don't have to tell you or any retiree except one obviously, if there is no COLA fund there will be no COLA check for retirees.
As far as the motivation of the retiree that is making this suggestion, God only knows. Maybe somebody wants to destroy the Fund. Replies: