Chesterton Tribune

 

 

Town Council acts to improve CPD officer pensions

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By KEVIN NEVERS

The Chesterton Town Council is moving to phase in an increase in the salary of a 1st Class Patrolman--the rank at which a Chesterton Police officer formally retires, for the purposes of the 1977 Police and Firefighter’s Pension Fund----from $70,000 to $80,000.

No 1st Class Patrolman actually earns that much: 1st Class is a “theoretical rank,” the one at which a CPD officer retires, not the one in which he or she serves. But by state statute officers who retire under the 1977 Fund collect a pension equal to 52 percent of a department’s 1st Class salary. Under the current 1st Class salary of $70,000, a retiree with 20 years of service collects an annual pension of $37,700, funded by an officer’s contribution of 6 percent of the 1st Class salary and the town’s contribution of 17.5 percent. When that officer retires, the 1977 Fund pays the pension, without any transactions at the local level.

Police Chief Dave Cincoski, however, in a memo to the council, is urging the council to increase the 1st Class salary to $80,000, which would raise a 20-year veteran’s retirement pension to $42,900, nearly $5,000 more than the $70,000 1st Class salary currently earns a retiree.

Although that 1st Class salary bump would require an additional total annual contribution by the town of up to $42,000, Cincoski suggested making up the difference by dipping into an existing surplus in the CPD Pension Fund of $345,000.

As matters stand--all things being equal--that surplus would be gone by 2027, an unsustainable state of affairs, Cincoski acknowledged in his memo. But as and when the council approves annual raises--a 2-percent raise for all municipal employees, including 1st Class Patrolman, is slated for 2020--the amount of CPD Pension Fund moneys needed to cover the difference would decrease. That’s because a given year’s 2-percent raise would be paid from the CPD Pension Fund surplus but the previous year’s 2-percent raise would be absorbed by the CPD’s annual budget “to extend the life” of the surplus.

Thus a 2-percent raise every year would raise the 1st Class Salary in increments--and correspondingly lower the town’s annual contribution, husbanding the CPD Pension Fund surplus--until in 2024 the 1st Class salary would hit $80,000. At that point the phased-in raise to $80,000 would be self-sustaining, with a pension fund balance of $205,935, Cincoski calculated.

Cincoski added in his memo that the town’s contracted financial advisor, London Witte Group, has reviewed his suggestion and found it be “an appropriate use” of the $345,000 CPD Pension Fund surplus.

Members unanimously approved at their meeting Monday night to begin a phased-in increase of the 1st Class Patrolman salary to $80,000. Associate Town Attorney Julie Paulson noted that the change won’t officially take effect until the council approves and adopts the 2020 Salary Ordinance.

Member Emerson DeLaney, R-5th, added that he and Fire Chief John Jarka are currently working to “start the same process on the fire side.”

 

Posted 10/31/2019

 
 
 
 

 

 

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