The value of the City of Falls Church’s retirement fund assets plunged 11 percent in the third quarter, from July 1 to Sept. 30, due to the poor performance of the wider markets, the F.C. City Council was told by its human resources chief Richard Parker at a work session in City Hall tonight. Thus, the City’s retirement fund is now only 82 percent funded, in total, compared to 93 percent funded at the end of the second quarter. Still, that is better than the July 1, 2010 level, which was 76 percent.
Parker’s report came in the context of a set of recommendations by the City’s Retirement Board, which the Council concurred would be adopted at next Monday’s business meeting. They involve, for new hires born after 1960, shifting the age when benefits kick in from 62 to 67 years of age, and a slight reduction in the level of contribution costs to the fund. Combined the savings are projected to be $449,000 for an overall $17 million City payroll.
Mindful of the impact of the savings on the ability to hire quality personnel going forward, the retirement board did not recommend any cut in the rate of “cost of living adjustments” (COLA), maintaining it at 50 percent of the inflation index (CPI), not to exceed four percent.
Council member Ira Kaylin hailed the board’s recommendations. “It’s a really good job. There are some cost savings and we’re still competitive,” he said. “It comes down to what the total reward is that we are offering new hires,” Councilman Ron Peppe said. “It comes down to competitiveness.” Peppe also cautioned that the parameters may change dramatically over the next two or three years, however. Parker said, while “very concerned” about the recent trend in the wider market, the Retirement Board’s recommendations are “responsible.”