Ross Vanderham, Edmond city treasurer and chair of the citys pension board, gave a detailed presentation at a joint city council and pension board workshop on the citys defined-benefit employee pension plan and recommended changes to the plan and ordinance.

Vanderham told council members the pension plan is a defined-benefit plan in place since January 1966 that covers regular full‑time city employees (excluding police and fire). He said the plan currently serves about 250 retirees and beneficiaries who receive monthly payments and covers roughly 580 full‑time employees. "I'm going to give you an awful lot of information about our pension plan," Vanderham said, describing current funding, investments and proposed ordinance changes.

The pension board voted unanimously at its July meeting to recommend the actuarially suggested funding rate for fiscal year 2025–26: a combined contribution rate of 18.43% of payroll, with the citys share rising from 11.94% to 12.29% and the employee share increasing from 6.00% to 6.14%. Vanderham said the change would begin with the first payroll in 2026 and would increase city costs by about $78,886 to $80,000 over what is currently budgeted.

Why it matters: Vanderham emphasized that annual actuarial valuations drive the recommended funding rate and that the board must balance meeting actuarial funding targets against city budget impacts. He said the board now requests the councils consideration of the actuarial recommendation and plans to propose several ordinance clarifications and updates before the end of the year.

Key details and supporting facts

- Plan type and membership: The plan is a defined-benefit pension for regular full‑time employees only; police and fire uniformed employees are excluded. Vanderham said approximately 580 full‑time employees are eligible and about 250 employees/beneficiaries receive monthly benefits.

- Vesting and retirement ages: Vesting is seven years. Normal retirement is at age 65 if vested. An early retirement option is available at age 55 with a reduced benefit. Final average earnings are calculated using the highest 30 consecutive months of earnings within the last five years.

- Contributions and recommendation: The board reported the combined current rate at 17.94% (city 11.94%, employees 6.00%). The pension board unanimously recommended the actuarial-recommended combined rate of 18.43% for 2025–26, with the citys share increasing to 12.29% and the employee share to 6.14%, effective with the first payroll of 2026. Vanderham said the department-level budget impact is roughly $78,886.

- Investments and market history: The board works with investment consultant Steven Spencer of Fiducient (Fiducient Advisors). Vanderham reviewed market-value history the board tracks: about $103–104 million on June 30, 2021; a drop to about $83 million after market losses in late 2022; and a rebound to about $127 million most recently. Vanderham said roughly 25% of the portfolio is in international markets and that performance in those markets has driven recent gains.

- Administrative and ordinance issues: The board identified several ordinance clarifications and potential changes to bring to council, including:
- Removing several seldom-used special early retirement options from the ordinance.
- Clarifying survivor/minimum surviving spouse and beneficiary language (Vanderham said city legal review by John Paparonis will be used to refine that language).
- Clarifying which administrative expenses may be paid from plan funds consistent with state statute (Vanderham cited a statute phrased in the meeting as "state statute 40-81-103(b)" and said legal counsel recommended specifying allowable expenses in the ordinance).
- Considering changes to board composition: adding a second citizen member and a second retiree member and removing the city clerk position as a mandatory seat (the clerk could remain as an employee representative).
- Reviewing the annual credited interest calculation on employee contributions (currently guaranteed at 5%) but making no immediate recommendation.

- Lump-sum payouts and cash flow: Vanderham noted an increasing number of retirees elect full lump-sum payouts, which creates short-term cash‑flow needs because the plan must liquidate investments to pay large lump sums. The board discussed observing lump-sum patterns but is not recommending a change to allow or limit lump sums at this time.

- Comparative context: Vanderham showed comparisons with other Oklahoma cities and the Oklahoma Municipal Retirement Fund (OKMRF). He said the weighted average among OKMRF members was about a 17.29% total rate (city 12.61% and employee 4.68%), and he described differences among larger cities (some use defined-contribution plans, some offer choices, and some have markedly higher combined rates after catch-up funding policies).

Discussion and next steps

Council members asked for added context and benchmarking. Vanderham agreed to provide department-level cost allocations and to attempt additional outreach to comparable cities requested by council members (Broken Arrow, Lawton, Moore and Enid). He also said the board will return with recommended ordinance language changes and a Fiducient contract for council consideration.

The pension board and council discussion distinguished discussion from action: the board took a formal action in July to recommend the actuarial funding rate (unanimous), while the council had not yet taken a formal funding vote during the workshop. Vanderham asked council members for time to return with ordinance language and contract items and said he hoped to present recommendations before year-end.

Quotes

"I'm going to give you an awful lot of information about our pension plan, plan, some of the background, some of our current financial status, and potentially some of the things that we may be coming to you suggesting some changes to the pension ordinance," Vanderham said at the start of his presentation.

On the ordinance updates, Vanderham said the board would "get them off the ordinance" for special early-retirement options that are not used and would bring clarifying language to council for review.

Ending

The pension boards recommendation and the ordinance revisions are expected to return to the council for formal consideration. Vanderham and staff will provide the requested benchmarking and department‑by‑department cost allocations and present a Fiducient contract and draft ordinance language for council action later this year.