The stock market has been good for investors the last two years and among beneficiaries nationwide are public employee retirement plans, including the pension system for city of Lakeland employees and retirees.
According to the Lakeland Employment Pension System’s board, the $1.27 billion fund had a $30.28 million surplus as of Oct. 1 with “no unfunded actuarial accrued liability.” As a result, the board in March recommended city commissioners set aside $2 million for a retiree bonus.
The Lakeland City Commission did so unanimously Monday, approving a resolution to issue bonuses to retired pensioners. Of approximately 2,870 enrolled in the system, about half are actively employed and about half are retirees and their beneficiaries. The retirees and beneficiaries will receive the bonus.
Lakeland Director of Retirement Services Cherie Matthews said that amounts to 1,331 retired pensioners receiving, on average, about $1,600 each in bonuses by April 30. The actual bonuses each receives could be more or less than $1,600 depending on how long the retiree worked for the city, she said.
The city contributes between 15.39% and 19.33% of an employee’s annual salary to his/her pension account annually.
Matthews said the pension fund is now funded at 104% of its obligations and that the bonus “has been in the works for the last year.”
Less than two years ago, financial analysts were expressing grave concerns that the pandemic would erode the viability of public-sector pension funds across the nation.
Lakeland’s pension fund has also been an issue of concern over the years. In 2014, The Ledger reported the system had $103 million in “unfunded liabilities” — available assets versus total obligations.
But with billions in Congressionally approved assistance matriculating into county and city coffers and a strong stock market in 2020 and 2021, public employee retirement plans have rebounded sharply.
The Center for Retirement Research at Boston College’s 2021 update estimates that public-sector plans on average saw “funding status” — assets on hand versus current/future liabilities — increase by 74.7% last year after increasing by 72.8% in 2020.
In 2021, the S&P 500 index gained 79% from 2020, providing an boon for many public and private retirement plans. The New York State Common Retirement Fund saw a 33.5% increase, for instance, while the Arkansas Teacher Retirement System gained 38.8%, according to The Center for Retirement Research at Boston College.
On Jan. 18, Lakeland City Treasurer Jeff Stearns presented commissioners with a pooled investments update that showed the city earned $18.8 million in 2021 and $21 million in 2020 in investment earnings. The city’s pension plan was among beneficiaries of that investment strategy, he said.
Commissioner Mike Musick said news of a $30.28 million pension “surplus” is unexpected good news for the city and its employees.
“How often do we hear in the news of a pension fund” paying bonuses? he said. “What a blessing.”
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