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Neptune Beach pension board, actuary propose COLA options for police retirees
Summary
Police pension board presented options including a 1% automatic annual COLA for retirees on/after Oct. 1, 2020 and a one‑time ad hoc increase for earlier retirees; actuary said pre‑paid funds and a 1% member contribution could fund the recurring COLA for about eight years without immediate city budget impact.
Neptune Beach — The Neptune Beach Police Officers' Pension Board and the board’s actuary presented a proposal July 15 to add cost‑of‑living adjustments (COLAs) to police retirement benefits, a change board members said would help retain and recruit officers and protect retirees’ purchasing power.
Dustin Campy, chair of the police officers pension board, told council the pension benefit is currently frozen at the level set at retirement and that retirees have no routine increases. He said a COLA would help maintain retirees’ financial stability as prices rise.
The actuary laid out two options: an automatic recurring 1% annual COLA effective Oct. 1, 2024 for those retired on or after Oct. 1, 2020, and a one‑time ad hoc increase for retirees who retired prior to Oct. 1, 2020 (2% per year of retirement up to a 10% maximum). The actuary said the city’s baseline pension cost is about $744,000 annually, of which the city currently pays about $509,000; state premium‑tax reimbursement is roughly $64,000 and active members currently contribute 8% of pay (about $170,000).
To cover the recurring 1% COLA for newer retirees without increasing the city’s annual budget obligation, the actuary recommended two offsets: active members contributing an extra 1% of pay and drawing on approximately $735,000 of preexisting prepaid trust funds. With those measures, the actuary estimated the prepaid funds would cover the COLA cost for about eight years; adding the one‑time ad hoc increase for older retirees would deplete the prepaid balance sooner (projected exhaustion by fiscal 2028–29).
Trustee Leona Shedden urged consideration of a phased approach to reach a higher COLA (she recommended a 3% target) by small annual increases and council members asked staff for projection tools and scenarios that would show the long‑term budget impact and options for gradually increasing municipal contributions.
Council members expressed broad support for exploring the ordinance, asked for financial projections and for staff to prepare the required ordinance language and impact statement before a formal reading.
Next steps: staff to work with the actuary and finance to prepare projections, ordinance draft and impact statement for future council consideration.
