The past year was a strong one for growth of the city’s police and fire pensions.
Peru Finance Director Justin Miller presented the results Monday from Governmental Accounting Standards Board for the pensions.
The report shows a 10.7% funding increase in the police pension over the past year, which is a total of 25% total increase over the previous year. The Peru police pension now sits at 53% funded.
“This is great news,” Miller said. “Hometown Trust and the police pension board deserve credit there as well as the City Council and everybody that took part in contributing that.”
Firefighters pension saw a similar increase of 9.7% over the course of the report as the pension currently sits around 76% funded.
“80% really is the benchmark that you look for to be a healthy plan,” Miller said. “We are really excited that it’s trending in that direction and Vezzetti Capital Management and the pension board deserve a lot of credit there.”
The GASB report is the assessment of the status of Peru’s police and fire pensions from April 30, 2020, through April 20, 2021.
“Normally there are very minimal changes, most of the time they are slightly down or slightly up, but this year’s is a little more noteworthy,” Miller said. “This is due to a couple of different factors.”
Miller said over the past 10 years, the city has increased the funding at its level, which has led to increased cash available for investments to be managed within the pension funds.
“We also had increases in the ability to invest in equities mixed with the market conditions of last year, which produced very abnormal and positive gains in both funds,” Miller said.
This yearly contribution is mostly made up of funds from the city’s general fund and collected property taxes. The contributions to the pension also come from current employees who contribute a portion of their wages.
For the police pension the city contributed around $1.7 million with the investment return of just more than $2.4 million. City contributions for the fire pension came in at roughly $300,000 with an investment return of $333,000 in investment gains.
The city is hopeful these gains can continue moving forward as they continue to climb toward the current goal of 80% funded in each pension for those that serve the community.