Regular readers of this blog are familiar with all the alarmist propaganda that the opponents of defined benefit plans gin up regarding the alleged underfunded status of pension systems. When a system and its city sponsors achieves above average funding levels, the opponents are silent.
Allow me to draw your attention to a San Antonio Business Journal article noting a recent finding of the Texas Pension Review Board about the Fire and Police Pension Fund of San Antonio.
In the SABJ story, the Fire and Police Pension Fund of San Antonio is recognized for its projected amortization period of 9.09 years, the second lowest among public pension funds in Texas, and the lowest among Texas pensions with more than $1 billion under management. An amortization period is also known as a funding period as it represents the length of time likely needed to eliminate a system’s unfunded liability based on current contributions from employees and active members. The state of Texas’ Pension Review Board guidelines say that funding periods should never exceed 40 years and suggest that healthy ranges are 25-30 years.
I know the Executive Director and Board members at the Fire and Police Pension Fund of San Antonio and I have nothing but the highest of praise for the dedicated effort that they exert to maintain a healthy pension fund on behalf of their active and retired members, and the taxpayers of their city.
The news story also correctly notes that police and fire fighters do not contribute to Social Security and don’t receive those benefits. That means the city of San Antonio contributes only to the pension system, not to Social Security “accounts” for those public sector employees. – Max Patterson