Actuary: Franklin City pension liabilities grow; recommended contribution rises to about $11 million

Kevin Sullivan, the USI actuary for the City of Franklin, presented the city's 2025 actuarial valuation for its defined benefit pension plans at the Budget & Finance Committee meeting on Oct. 16. Sullivan said the entry-age normal funded ratio used for GASB measurement is about 67.8% for the consolidated plan, down from roughly 83% in 2021.

Why this matters: the valuation determines the city's recommended annual pension contribution and informs budget planning. Sullivan warned the city's recommended cash contribution has risen substantially in recent years because of changes in assumptions and greater-than-expected salary increases for active employees.

Sullivan opened by describing the two-plan structure used in Franklin: a legacy closed plan for employees hired before Jan. 1, 2017, and an open plan enrolled in the Tennessee Consolidated Retirement System (TCRS) for employees hired on or after that date. "We're actually now at the point where ... we have slightly more active members in the TCRS plan than in the legacy plan," Sullivan said, adding that liabilities remain concentrated in the legacy plan because those participants typically have longer service and more retirees.

Sullivan…