Brentwood weighing hazardous‑duty pension supplement for police and firefighters; actuarial report shows roughly $3 million one‑time cost

Brentwood finance staff and members of the City Commission discussed whether to adopt a supplemental hazardous‑duty pension benefit for sworn police and fire employees during a lengthy briefing Tuesday. Staff presented actuarial findings from the Tennessee Consolidated Retirement System (TCRS) that showed the proposed supplement would create immediate unfunded liabilities and materially increase the city's pension funding requirement.

Jay, a city staff member presenting the actuarial summary, explained that the city currently has a legacy plan and a hybrid plan for different employee cohorts and that the bridge benefit adopted in 2009 already provides elevated retirement multipliers designed to help public safety employees bridge to Social Security at early‑retirement age. The proposed hazardous‑duty supplement would add an additional 0.375 percentage point multiplier for ages 60 through 67, extending a benefit bridge to full Social Security age and increasing retirement benefit levels for 25‑ and 30‑year employees.

The actuarial numbers discussed included a rough estimate that fully prefunding the new supplemental benefit would be about $3,000,000 across general and public safety plans. Staff said amortizing that cost over 10 years would imply roughly $300,000 a year. Jay also noted newly released TCRS assumptions that will raise the city's base contribution rates (for example, the legacy plan employer rate referenced in the briefing rose to 9.68% in the actuarial update), which reduces the city's current overfunding cushion.

Staff recommended caution. "The hazardous duty benefit creates pension liabilities that currently do not exist," Jay said, summarizing staff's concern that the new benefit would eliminate the city's overfunded position and expose the city to additional long‑term actuarial risk. He emphasized that adopting the supplement would create retrospective unfunded liabilities that persist and could grow if future actuarial assumptions or investment performance deteriorated.

Commissioners and public safety leaders split on the proposal. Several commissioners voiced support for adopting the supplement as a recruitment and retention tool and argued it would help compensate first responders for the stress and health impacts of the work. One commissioner said the annualized cost — in staff examples, about $300,000/year if amortized — was manageable for Brentwood and defended the supplemental benefit as a core public safety investment. "A core responsibility of government is public safety," the commissioner said.

Police and fire leaders said the bridge benefit is an important recruitment and retention feature but acknowledged many recruits focus on near‑term take‑home pay. Chief representatives said the hazardous‑duty supplement could help retain personnel who might otherwise leave for agencies that offer better retirement additions. Staff and the chief also noted that any supplemental benefit accrued applies only for time served after adoption (employees do not retroactively accrue years in the supplement when they move between agencies), and that only Montgomery County in Tennessee had adopted the supplement to date; staff said 22 agencies had requested actuarial reports but that adoption elsewhere was limited.

The commission did not adopt the hazardous‑duty supplement at the briefing. Commissioners asked for more time and additional comparative information and directed staff to return with follow‑up analysis. One member of the commission asked for clearer cost options and other recruitment and retention alternatives (such as different pay scales, shift differentials and take‑home vehicle policies) to compare costs and benefits. Staff said the current city budget was being developed without the supplement and recommended any decision be timed to allow budget staff to incorporate the actuarial impact.

Next steps: Commissioners asked staff to provide additional details, including comparisons with other agencies, the likely annual budget impact under different amortization schedules, and recruitment/retention counterproposal cost estimates. The commission tentatively agreed to revisit the item within roughly two weeks to allow budget‑season constraints and additional information gathering.