November 16, 2016
The new Portland police contract that boosts starting officer pay and delivers substantial raises to veteran officers will drive up retirement benefits by an estimated $6.5 million to $7.5 million over its first five years, a city financial assessment predicts.
Officers will make about 9.3 percent more by the end of the three-year contract. Because their retirement benefits are calculated based upon pay, the pension costs will grow as well.
It"s not clear yet how the increased pension costs will affect the city property tax levy that supports the Portland Fire and Police Disability and Retirement Fund.
"I"m as curious as you guys are to see how this shakes out," Stacy Jones, the fund"s financial manager, told the fund"s board of trustees Tuesday.
The fund"s pension costs, which includes retirement benefits for both Portland police and firefighters, have been over $100 million a year since 2012 - up to $115 million in fiscal 2015-16.
The fund, unique among public pension funds, is financed by Portland taxpayers through annual property taxes. Each year, the city sets the tax in an amount equal to the fund"s administrative expenses and benefit costs.
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