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East Point pension board asks council to approve ad hoc COLA for class 4 and 5 retirees
Summary
Pension advisers and board members recommended an ad hoc cost‑of‑living adjustment for class 4 and 5 retirees, estimating a one‑time actuarial contribution of about $1.25 million; council agreed to place a resolution on the consent agenda.
The East Point Pension Board recommended on July 14 that the council approve an ad hoc cost‑of‑living adjustment for class 4 and 5 retirees, with board advisers estimating a one‑time actuarial contribution of about $1.25 million to fund the change beginning Jan. 1, 2025.
Why it matters: The pension fund is near fully funded — presenters said it was about 97 percent funded — and the board argued that an ad hoc increase would be affordable under current funding and would not change the city’s required annual contribution, only the amortization timeline.
What the pension advisers told council
Jeff Swanson of Southeastern Advisory Services told the council the East Point fund has grown from about $43 million in 2011 to about $182 million and ranks in the top decile of similar plans over 10– and 15‑year periods. Executive Director Charlotte Cagle and plan staff explained that class 1, 2 and 3 retirees receive an annual CPI‑based COLA up to 3 percent, while class 4 and 5 retirees receive ad hoc adjustments only when the board recommends and the council authorizes them.
Scott Bauer, plan staff, told the council the board’s recommendation is for a 2.75 percent adjustment (matching class 1–3 this year) and that the total present‑value cost to provide that increase to class 4 and 5 retirees is roughly $1,249,000. Bauer said the city currently funds pension contributions on a schedule intended to restore full funding and that the proposed COLA would not change the annual contribution amount but would extend the payment period by roughly one year in actuarial terms.
Council action
Council members asked whether the board’s recommendation is required every other year (the plan document calls for an every‑other‑year recommendation) and whether the increase would be retroactive; presenters said the board recommended the increase be retroactive to Jan. 1, 2025. Council agreed to place the pension board’s resolution approving an ad hoc COLA for class 4 and 5 retirees on the consent agenda for the next council meeting.
Ending
The pension board said it will ask actuaries to provide cost studies and that staff will place the recommended resolution on consent for council action. Board members emphasized that the plan’s funding status and long‑term investment performance supported the recommendation.
