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Actuary urges layered amortization to smooth Norwalk pension contributions; board discusses but defers city decision
Summary
Actuarial consultant presented models showing a layered amortization method would reduce contribution volatility for Norwalk’s plans but could raise near‑term payments; trustees discussed assumption changes to mortality, retirement, termination and disability rates and noted the ultimate decision rests with city finance and counsel.
An actuarial consultant recommended that Norwalk adopt a layered amortization method for pension plan unfunded liabilities to reduce contribution volatility and protect the city budget from large short‑term spikes if the market suffers a major loss.
Using the police pension as an example, the consultant said the plan currently has an unfunded accrued liability of about $56.7 million with a remaining closed amortization of 13 years and an annual amortization payment near $5.36 million under the current method. The consultant modeled a hypothetical scenario with above‑average returns followed by a recessionary asset loss in 2030 and showed that, under the current closed‑period approach, the unfunded liability could grow to roughly $70.8 million with a much shorter remaining…
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