The Texas Pension Review Board released a report last week finding the Midland firemen’s relief and retirement fund could run out of assets in the next two decades
MIDLAND, Texas (KOSA) -The Texas Pension Review Board released a report last week finding the Midland firemen’s relief and retirement fund could run out of assets in the next two decades.
The numbers don’t look good for the Midland Firemen’s relief and pension fund, but rather than stick their head in the sand, the fund board is trying to solve the problem.
Assistant Chief Brian McGary from the Midland Fire Department is aware of the pension’s problems.
The recent report from the Texas Review Board didn’t catch him or the fire department off guard.
“We knew there was going to be some shortfalls in terms of funding because we do an actuary every other year,” said McGary.
The retirement fund has been around since the 1940′s but it’s teetering off a precarious ledge. The review board found the fund will run out of assets by 2043, in a best-case scenario.
The main problem, fund investments have radically underperformed in nearly a decade of bull markets, returning an average of just 5.1 percent annually.
That’s because of the fund’s conservative positions… which never saw high gains or major losses.
“We Maybe didn’t capitalize on that. We also didn’t take the shortcomings whenever the markets went down,” said McGary.
The fire department realizes those conservative positions aren’t tenable any longer, a growing number of fund payments will force the department to make changes.
“We’re looking at funding, of course. We’re looking at how the benefit package is put together. All those things are taken into account to eventually to pay out the benefit,” said McGary.
That could mean anything from raising the firefighter contribution, which McGary says is just over fourteen percent of a current paycheck to changing investment positions.
The department is still in the early stages of making any changes. The fund board intends to go through the pension review board’s recommendations point-by-point in the near future.
“We don’t want to go through this little change and this little change and have to make another change. We want to make sure we’re going the right direction. To do that, we’re in talks with our actuary, with our investment committee, with the city, all those different entities to make sure we make the right choices for the future of the fund,” said McGary.
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