Town Pension Funding a Concern for Officials
NEWINGTON - Lagging pension funding ratios could prompt the need for significant increases in that area over the course of the next 10 years, according to Deputy Mayor Clarke Castelle.

       The town’s current 53.9 percent funded ratio was a subject of concern at a couple of recent Town Council meetings. The figure is a far cry from the 100 percent a municipality needs in order to be considered financially healthy in that regard, and Newington has so far been unable to climb back to the 80 percent ratio it was at prior to the recession.

       What has slowed the recovery is unclear, but to achieve 100 percent, the town will have to increase its pension fund contribution anywhere between 6 percent and 8 percent annually over the course of the next 10 years, according to Castelle.

       For police employees, that benchmark can be reached in 11 years, he said. For municipal and administrative staff, it is expected to take 21 years, according to Castelle.

       The other problem: Meeting the yearly pension funding demands will likely be problematic when it comes to funding other services in town, Castelle said.

       And it’s not like the town has not been paying what actuaries have recommended. In fact, pension contributions have increased 266 percent between the 2004-05 Fiscal Year to next year’s projections, while the town’s operating budget-excluding Board of Education and MDC expenditures-have gone up 44.6 percent in that time frame.

       Castelle compared the 2004-2005 pension contribution of $1.3 million-part of that year’s $23.1 million operating budget-to what is supposed to be a $4.7 million pension output next year. That’s with a $33.4 million operating budget for the 2015-16 Fiscal Year.

       On a positive note, the percentage is going up, although slowly, said Town Manager John Salomone.

       Fiscal year 2014’s 53.9 percent is a slight increase from the previous year’s 51.2 percent. By July of this year, it is supposed to increase again to 56.8 percent.
MORE NEWINGTON NEWS  |  STORY BY MARK DIPAOLA  |  Jul 09 2015  |  COMMENTS?