PARKERSBURG — The Parkersburg Policemen’s Pension and Relief Fund board voted this week to endorse a plan to close the fund to new hires.
It also included a statement indicating it believes the move is in the best interests of current employees, retirees and future hires. The vote was 4-0, with one member absent.
“We’re protecting the current and older guys,” Parkersburg Police Lt. Greg Collins, a member of the board, said during Tuesday’s meeting, “but we’re not disavowing or…”
“Kicking the other guys to the curb,” police Capt. John Young, another board member, finished.
The endorsement only shows the board’s support. City Council must make the final decision on whether to close both the existing police and fire pensions.
The move was proposed earlier this month by Parkersburg Mayor Tom Joyce and Finance Director Eric Jiles as a way to stop the continued growth of the liability for the funds and payment costs.
State law requires the city to increase its contribution by 7 percent each year, which drives the cost up. In addition, the payments to the police pension fund do not cover the annual benefit payouts, while fire pension payments exceed the payouts but the total liability is only about 20 percent funded, Jiles has said.
Closing the plan would stop the liability from increasing as new civil service employees are hired, while also allowing the city to change the method of payment in a way that will slow or eventually reverse the increasing costs.
“Closing this old plan, it’s 100 percent the right thing to do,” Collins said. “The new plan … are people going to start pointing the finger at us for not taking care of the next generation?”
If City Council votes to close the plans, new police officers and firefighters would be covered under a state retirement plan that costs less and provides a lower guaranteed benefit than the current pensions. But Assistant City Attorney Rob Tebay told Collins the new plan is spread out among multiple agencies in the state and is more financially sound than the cities’ current pensions.
“I would make the argument that for the new hires, they’re actually in a better position,” Tebay said.
Jiles said the new plan is based on sound actuarial principles, while the current one is not.
“Unfortunately, the only way to fix this plan is to cut it off,” he said.
Earlier in the day Tuesday, Joyce and Jiles met with police and fire retirees to explain the situation to them and field questions.
“I think that the biggest concern that they had was, ‘What happens to our plan? Are there any changes to our benefits?’” Jiles said.
The current benefits will not change, and the city is required by state law to continue funding the plans, said Joyce, who chairs both departments’ pension boards.
“I think we alleviated their concerns,” he said.
The fire pension board did not take action on an endorsement Monday, with Fire Chief Jason Matthews saying he was reluctant to do so until after the meeting with retirees.