In a memorandum to all departments and agencies, the Fund’s board of trustees said it adopted a new employer contribution rate of 60.8686 percent to take effect beginning Oct. 1, 2011.
The Fund said the rate was derived from the actuary report of 2009.
It asked agencies to make the necessary adjustments to their budgets to accommodate this increased cost of employee benefits for defined benefit plan members.
Effective Oct. 1, the employees’ share for Class I will be 10.5 percent and 11 percent for Class II. The employer share will jump to 60.8686 percent from 37.3939 in 2010.
In an interview, Fund Chairman Sixto Igisomar their “intention is not to reduce the benefits.”
He noted that the scenarios presented by the Fund’s actuary Buck Consultants last month were disclosed to the public and were based on the current status of the Fund and its unfunded liabilities.
The scenarios either called for increased government contribution of up to $50 million a year, elimination of COLA and future disability benefits, 10 percent to 50 percent across-the-board reduction in benefits, along with the elimination of COLA and disability benefits.
The last three scenarios that called for a reduction of benefits also showed that government contributions would go down to $9 million annually should a 50 percent across the board cut in benefits was to be implemented.
Igisomar said the Fund never intended to implement drastic measures.
“It was not the intention of the Fund to do that. But it is the Fund’s intention to inform the public so they can see what we will be facing,” he added.
He said it’s the Fund’s fiduciary duty to look at possible options to protect the beneficiaries.
“The top of the list is to protect the beneficiaries. The top of the list is to protect the Fund, to work with what we have, to work within our means, how we can assist them giving them the pension plan that they want,” he said, referring to Fund members.
He said they are finding ways to evaluate the unfunded liabilities which, as of Oct. 1, 2009, totaled $591.78 million based on the actuarial report.
He said they are looking for realistic options.
“It is one thing to go after the government and for them to pay us…. But right now, what is on paper is not what is going to pay these retirees. We need the actual, physical dollar on hand.”
