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Police and fire pension contribution jumps $2.2 million as overtime and ‘spiking’ drive liabilities, actuary says
Summary
Gabriel, Roeder, Smith & Company reported an estimated $2.18 million increase in the police and fire retirement system contribution, driven primarily by a roughly $2 million rise in payroll largely attributable to high overtime and higher pay years that inflate final average compensation.
Francois Pieterse, senior consultant and actuary at Gabriel, Roeder, Smith & Company (GRS), told the Dearborn Heights City Council that the police and fire retirement system’s required employer contribution rose from $5,969,000 to $8,147,000 — an increase of about $2,178,000 — for the most recent valuation period. Pieterse attributed most of that increase to a roughly $2,000,000 jump in payroll largely caused by elevated pay and overtime in the membership.
Pieterse said that the membership count remained roughly stable year to year but that total payroll rose sharply: in the three-year summary the actuary reported active-member payroll of about $9.7 million in 2023 and about $11.5 million in 2024, a roughly 20% increase. "I think there were 1 member who earned more than a hundred thousand dollars in overtime," Pieterse said, noting that excessive…
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