Board Of Aldermen - Minutes - 9/21/2021 - P25

Past - 1977:
The Employer Subsidy

» State reduces employer contribution subsidy
for teachers to 35% from 40%

> State creates 35% employer contribution
subsidy for police officers and firefighters
employed by political subdivisions

» Subsidy remained in place until it was
reduced beginning in 2009 and then
eliminated in 2011

Past - 1983:
Heads | win, tails you lose

» Legislature creates Special Account to fund

future COLA and OPEB benefits

e Funded by ‘excess earnings’ - or ‘gain-sharing’ -
when investment return exceeded the assumed rate
of return by a set percentage

° Subsequently determined to be in contravention of
the Internal Revenue Code as it shifted funds from
the pension trust and contributed to a structural
unfunded liability

9/20/2021