Edgewater firefighters board hears actuary: multiplier boost could add $25,000–$150,000 a year

An actuary told the City of Edgewater firefighters board that raising the pension benefit multiplier could increase the city’s annual contribution by tens of thousands of dollars.

Doug Lozen, the actuary who presented a recent cost study, laid out four standalone scenarios for changing the benefit accrual multiplier and whether any change would apply prospectively or be applied retroactively. He said the study shows that moving the multiplier from 3% to 3.25% only for future service (scenario A) would raise the employer contribution rate from about 22.5% to roughly 23.6%, “that would be about $25,000 per year or so, give or take,” using the board’s current payroll base. By contrast, applying a 3.5% multiplier retroactively for all active firefighters (scenario D) would raise costs substantially; Doug said, “that would cost about $150,000 per year.”

The actuary explained the method: take the difference in contribution rates between the current plan and a chosen scenario and multiply that by the payroll base (which Doug said is about $2,500,000). Board members asked for the numeric examples and Doug confirmed the payroll figure so the board or staff could calculate alternate dollar impacts themselves.

Doug told the board the scenarios were prepared from the 2023 valuation and that he will present the 2024 valuation at the June meeting; he said the 2024 report appears to mirror 2023 with very little change. The presentation did not include a formal motion or a board decision; members were given the figures and invited to follow up with questions before June.

Next steps: the board will review the full 2024 valuation when it is presented in June and may discuss any recommended policy or contribution changes then.